CALIMA ENERGY LIMITED
ABN 17 117 227 086
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
Blackspur 02-29 battery (Brooks)
1
CORPORATE INFORMATION
Directors & Officers
Name
Glenn Whiddon
Karl DeMong
Mark Freeman
Johnathon Busing
Title
Chairman
Non-Executive Director
Finance Director
Company Secretary
Registered Office
Perth, Australia
(Corporate headquarters)
Unit 103, 28 Station Street,
Cottesloe
Australia 6011
Contact information
Telephone: +61 (0) 8 6500 3270
Facsimile: +61 (0) 8 6500 3275
Email: info@calimaenergy.com
Website: www.calimaenergy.com
Auditor
BDO Audit Pty Ltd
Level 9
Mia Yellagonga Tower 2
5 Spring Street
PERTH WA 6000
Bankers
Australian Bankers
National Australia Bank
Level 14, 100 St Georges Terrace
Perth WA 6000
Share registry
Computershare Investor Services Pty Ltd
Level 11, 172 St. Georges Terrace,
Perth WA 6000
Telephone: +61 (0) 8 9323 2000
Facsimile: +61 (0) 8 9323 2033
TABLE OF CONTENTS
Section
Page
2
3
4
4
5
10
33
34
35
38
40
Highlights for the year ended 31 December 2024
Chairman & CEO’s letter
About Calima Energy Limited
Operational and financial results
Directors’ report
Consolidated financial statements and notes
Consolidated Entity Disclosure Statement
Director’s declaration
Independent auditor’s report
Auditor’s independence declaration
Advisories & guidance
2
HIGHLIGHTS
For the year ended 31 December 2024
HIGHLIGHTS FOR THE COMPANY DURING THE 2024 FINANCIAL YEAR WERE:
•
$81.1 Million Cash Sale of Blackspur Oil Corp – On 5 January 2024, the Company announced a binding definitive
agreement with Astara Energy Corp., to sell 100% of its ownership in Blackspur Oil Corp. The sale settled on 23rd
February 2024 with net cash consideration of ~A$81.1 million (post all estimated tax liabilities and foreign exchange
movements).
•
$80 million (12.63c p/sh) returned to shareholders – On 21 June 2024 shareholders received 12.63 cents per share
capital return with a total of $80 million returned to shareholders.
•
ATO Ruling – the Commissioner of Taxation has issued a Class Ruling consistent with the recent capital return. The ATO
have released their tax ruling here: www.ato.gov.au/law/view/document?docid=CLR/CR202437/NAT/ATO/00001.
•
Shareholder Buy Backs: – the Completed an unmarketable buy back and share buyback between September to
December 2024 resulting in the Company acquiring and cancelling a totalling 178,996,128 shares at $0.0083373 per
share. Total cost was $1.49m.
•
$1.3 Million Cash Sale of Calima Energy Inc – On 10 September 2024, the Company announced a binding definitive
agreement to sell 100% of its ownership in Calima Energy Inc. The transaction settled in October 2024.
•
Over the last 2 years the Company has returned over $90 million as capital returns and over $2 million in buybacks.
Subject to shareholder approval on 1 April 2025 the Company will undertake an $5.4m capital return bringing total
distributions and buy-backs to ~$97.5 million.
3
CHAIRMAN’S LETTER
For the year ended 31 December 2024
Dear Shareholders,
It is with great pleasure that I present to you the Annual Report for Calima Energy Limited for the financial year ended 31
December 2024. This year marks a pivotal moment in the Company’s journey, one defined by significant progress and
transformative decisions aimed at delivering value to our shareholders.
Strategic Transactions and Value Delivery
2024 has been a year of meaningful milestones for Calima Energy. Following many years of investment and operations in
Canada, we successfully executed our strategy to unlock and realize the intrinsic value of our Canadian assets that was not
reflected in our share price.
On 5 January 2024, we announced a binding definitive agreement with Astara Energy Corp. for the sale of 100% of our
ownership in Blackspur Oil Corp. This transaction settled on 23 February 2024, delivering net cash proceeds of
approximately A$81.1 million, post-tax liabilities and foreign exchange movements. This follows our earlier divestment of
the Montney gas condensate acreage in North-East British Columbia in July 2023.
Further, in September 2024, we announced the sale of Calima Energy Inc. for A$1.3 million, which settled in October 2024.
Returning Value to Shareholders
We remain deeply committed to maximizing shareholder value, and I am pleased to report that we distributed A$80 million
in June 2024 through a 12.63 cents per share capital return. Additionally, between September and December 2024, we
completed share buybacks totalling 178,996,128 shares at an average price of A$0.0083373 per share, amounting to
A$1.49 million.
In total, over the past two years, we have returned A$91.5 million to our shareholders—a remarkable testament to our
unwavering focus on delivering tangible benefits to those who have supported us.
Taxation Clarity
The Australian Taxation Office (ATO) issued a Class Ruling consistent with our recent capital return. This ruling provides
clarity and assurance to our shareholders regarding the tax treatment of these distributions. The ruling can be accessed on
the ATO website: www.ato.gov.au/law/view/document?docid=CLR/CR202437/NAT/ATO/00001.
Looking Ahead
As we turn the page to the next chapter, we will continue to pursue investment opportunities that align with our strategic
vision. With ~$7 million in net working capital the Board has resolved, subject to shareholders approval, to proceed with
an additional capital return of 1.2c per share (~$5.45 million) in April 2025. Post-distributions, the Company will continue
to focus on identifying new investment opportunities.
Acknowledgements
I would like to extend my heartfelt gratitude to all our stakeholders, including our employees, contractors, advisors, and
the communities we have worked with over the years, particularly in Canada. Your efforts and contributions have been
instrumental in our success.
To our shareholders, thank you for your continued trust and support. As we navigate this exciting phase of transformation,
we remain steadfast in our commitment to delivering exceptional outcomes for you.
Thank you for being part of this journey.
Yours sincerely,
Glenn Whiddon
Chairman
4
ABOUT CALIMA ENERGY LIMITED
Following the sale of Blackspur Oil Corp and the Montney Assets and Calima Energy with the Paradise Field, the Company's
focus has shifted to assessing new oil and gas project opportunities. The Company is dedicated to responsible corporate
practices, and places high value on adhering to strong Environmental, Social and Governance ("ESG") principles.
OPERATIONAL AND FINANCIAL RESULTS
For the year ended 31 December 2024
Adjusted EBITDA
Year
ended
Year
ended
31 December
2024
31 December
2023(2)
Oil and natural gas sales
$
-
$
93,366,740
Royalties
-
(19,246,026)
Operating and transportation expenses
-
(31,622,546)
General and administrative expenses
(1,393,220)
(8,932,519)
Adjusted EBITDA(1)
$
(1,393,220)
$
33,565,649
(1)
Refer to Advisories and Guidance on page 43 for additional information regarding the Company’s GAAP and non-GAAP measures.
(2)
Included Discontinued operations in year ended December 31, 2023. If presenting only continued operations, adjusted EBITA was ($1,544,603).
Net income (loss)
Year
ended
Year
ended
For the year ended
31 December
2024
31 December
2023
Adjusted EBITDA (1)
$
(1,393,220)
$
33,564,899
Financing and interest
(5,395)
(1,296,356)
Interest income
1,406,109
-
Deferred income tax (expense) recovery
-
(2,104,389)
Depletion and depreciation
(20,833)
(21,538,490)
Impairment loss
-
(48,332,966)
Loss on equity investment
-
(4,167)
Realised loss on risk management contracts
-
(623,334)
Unrealised gain on risk management contracts
-
1,691,105
Share-based compensation
77,574
(2,743,165)
Foreign exchange and other
(118,140)
(7,809)
Net income (loss)
$
(209,053)
$
(41,394,672)
(1)
Refer to Advisories and Guidance on page 43 for additional information regarding the Company’s GAAP and non-GAAP measures.
Reserves update
During the year the Company disposed of all of its producing/exploration assets and accordingly no reserves exist.
Forward Looking Statements
This release may contain forward-looking statements. These statements relate to the Company’s expectations, beliefs, intentions
or strategies regarding the future. These statements can be identified by the use of words like “anticipate”, “believe”, “intend”,
“estimate”, “expect”, “may”, “plan”, “project”, “will”, “should”, “seek” and similar words or expressions containing same. These
forward-looking statements reflect the Company’s views and assumptions with respect to future events as of the date of this
release and are subject to a variety of unpredictable risks, uncertainties, and other unknowns. Actual and future results and
trends could differ materially from those set forth in such statements due to various factors, many of which are beyond our ability
to control or predict. These include, but are not limited to, risks or uncertainties associated with the discovery and development
of oil and natural gas reserves, cash flows and liquidity, business and financial strategy, budget, projections and operating results,
oil and natural gas prices, amount, nature and timing of capital expenditures, including future development costs, availability and
terms of capital and general economic and business conditions. Given these uncertainties, no one should place undue reliance
5
on any forward-looking statements attributable to Calima, or any of its affiliates or persons acting on its behalf. Although every
effort has been made to ensure this release sets forth a fair and accurate view, we do not undertake any obligation to update or
revise any forward-looking statements, whether as a result of new information, future events or otherwise.
OUTLOOK
Calima confirmed the sale of Blackspur Oil Corp. to Astara Energy Corp for $81.6 million received, the sale of Calima Energy Inc
to Aldon Energy for $1.3 million and the buy-back of 178,996,128 shares at $0.0083373 per share for a total of $1,492,345. The
Company completed a capital return of A$80 million from the Blackspur Sale to Calima shareholders and following receipt of a
private ATO tax ruling. The Company has net working capital of $7.1 million as at 31 December 2024 and is focused on (new
project acquisition / or capital return).
DIRECTORS’ REPORT
For the year ended 31 December 2024
The Directors of Calima Energy Limited (“Calima” or the “Company”) are pleased to present the Directors’ Report for the
year ended 31 December 2024. This Director’s Report primarily includes the financial results of Calima and its two wholly
owned Canadian subsidiaries, Blackspur Oil Corp. (“Blackspur”) and Calima Energy Inc. (collectively, the “Calima Group”).
Dollar figures are expressed in Australian currency unless otherwise indicated.
Principal activities
Calima is an energy company pursuing the exploration and development of oil and natural gas.
Significant changes in state of affairs
During the year ended 31 December 2024, the following significant changes in the entity’s state of affairs occurred:
on 26 March 2024, 7,360,000 shares were issued upon the exercise of 7,360,000 Performance Rights to management
and employees of Blackpur Oil Corp pursuant to the Employee Share Plan.
On 30 April 2024, 2,500,000 unlisted options expired.
on 14 June 2024, 355,250 shares were issued upon the exercise of 355,250 Performance Rights to management and
employees pursuant to the Employee Share Plan.
On 2 September 2024 the Company completed its unmarketable parcel buy back for a total of 14,365,781 shares with
~$119,772 returned to those shareholders.
On 3 October 2024 the Company completed its stage 1 equal access buy back for a total of 46,909,296 shares with
~$391,097 returned to those shareholders.
On 11 December 2024 the Company completed its stage 2 equal access buy back for a total of 117,721,051 shares
with ~$981,476 returned to those shareholders.
On 10 September 2024, the Company announced a binding definitive agreement to sell 100% of its ownership in Calima
Energy Inc. The sale is closed on October 22, 2024.
On 31 December 2024, 2,500,000 performance class C securities were relinquished and cancelled.
Operational and financial results
The operational and financial results for the year ended 31 December 2024 have been presented on pages 4 through 5.
Principal Risks Affecting the Group
Calima’s management team is focused on long-term strategic planning and has identified the key risks, uncertainties and
opportunities associated with the Company’s business that can impact the financial results. They include, but are not limited
to, the items listed below.
Acquisitions
The price paid for acquisitions is based on engineering and economic estimates of the potential reserves made by
independent engineers modified to reflect the technical views of Management. These assessments include a number of
material assumptions regarding such factors as recoverability and marketability of oil, natural gas, and NGLs, future prices
of oil, natural gas and NGLs, and operating costs, future capital expenditures and royalties and other government levies
that will be imposed over the producing life of the reserves. Many of these factors are subject to change and are beyond
the control of Management. In particular, changes in the prices of and markets for oil, natural gas and NGLs from those
anticipated at the time of making such assessments will affect the value of Calima. In addition, all such estimates involve a
measure of geological and engineering uncertainty that could result in lower production and reserves. Actual reserves could
vary materially from these estimates.
6
Variations in Foreign Exchange Rates and Interest Rates
World commodity prices are quoted in United States dollars. Prior to the sale of BSO and Calima Energy Inc, the Company
revenue, expenses and capital costs were materially affected by movements in the United States dollar exchange rate.
Moving forward the Company may acquire a new project offshore whose acquisition cost and capital development will be
affected by material increases and reductions in FX.
Third Party Credit Risk
Calima assumes customer credit risk associated with oil and gas sales, financial risk management contracts and joint venture
participants. In the event that Calima’s counterparties default on payments to Calima, cash flows will be impacted. A
diversified customer base is maintained and exposure to individual entities is reviewed on a regular basis.
ENVIRONMENTAL RISKS
General Risks
All phases of the oil and natural gas business present environmental risks and hazards and are subject to environmental
regulation pursuant to a variety of federal, provincial and local laws and regulations. Environmental legislation provides for,
among other things, restrictions and prohibitions on spills, releases or emissions of various substances produced in
association with oil and natural gas operations. The legislation also requires that wells and facility sites be operated,
maintained, abandoned and reclaimed to the satisfaction of applicable regulatory authorities. The Company conducts its
operations with high standards in order to protect the environment, its employees and consultants, and the general public.
Although Calima believes that it is in material compliance with current applicable environmental regulations, no assurance
can be given that environmental laws will not result in a curtailment of production or a material increase in the costs of
production, development or exploration activities or otherwise have a material adverse effect on Calima’s business,
financial condition, results of operations and prospects.
There remains a great deal of uncertainty as to what regulatory measures will be developed by the provinces or in concert
with the federal government to address the decommissioning liabilities and environmental liabilities in the future. In
addition, the provincial and/or federal government decisions has had an impact and is expected to continue to have an
impact on how much credit lenders are willing to provide to oil and gas companies. This could impact Calima’s ability to
obtain financing on acceptable terms and the willingness of the Company’s lenders to continue to provide credit to the
Company.
Climate Change Risks
Our exploration and production facilities and other operations and activities emit greenhouse gasses ("GHG") which may
require us to comply with federal and/or provincial GHG emissions legislation. Climate change policy is evolving at
regional, national, and international levels, and political and economic events may significantly affect the scope and
timing of climate change measures that are ultimately put in place to prevent climate change or mitigate our effects. The
direct or indirect costs of compliance with GHG-related regulations may have a material adverse effect on our business,
financial condition, results of operations and prospects. Some of our significant facilities may ultimately be subject to
future regional, provincial and/or federal climate change regulations to manage GHG emissions. In addition, climate
change has been linked to long-term shifts in climate patterns and extreme weather conditions both of which pose the
risk of causing operational difficulties.
PROJECT RISKS
Calima is set to acquire new projects. Project delays may delay expected revenues from operations. Significant project cost
over-runs could make a project uneconomic. Calima’s ability to execute projects and market oil depends upon numerous
factors beyond the Company’s control, including:
•
commodity prices and oil differentials;
•
the availability of processing capacity;
•
the availability and proximity of pipeline capacity;
•
the availability of storage capacity;
•
the availability of, and the ability to acquire, water supplies needed for drilling and hydraulic fracturing, or Calima’s
ability to dispose of water used or removed from strata at a reasonable cost and within applicable environmental
regulations;
•
the supply of and demand for oil;
•
the availability of alternative fuel sources;
•
the effects of inclement weather;
•
the availability of drilling and related equipment;
•
unexpected cost increases;
7
•
accidental events;
•
currency fluctuations;
•
changes in regulations;
•
the availability and productivity of skilled labour; and
•
the regulation of the oil industry by various levels of government and governmental agencies.
Because of these factors, Calima could be unable to execute projects on time, on budget, or at all, and may be unable to
market the oil that the Company produces.
CYBER-SECURITY
The Company employs and depends upon information technology systems to conduct its business. These systems have the
potential to introduce information security risks, which are growing in both complexity and frequency and could include
potential breakdown, invasion, virus, cyber-attack, cyber-fraud, security breach, and destruction or interruption of Calima’s
information technology systems by third parties or insiders. Unauthorized access to these systems by employees or third
parties could lead to corruption or exposure of confidential, fiduciary or proprietary information, interruption to
communications or operations or disruption to our business activities or our competitive position. Further, disruption of
critical information technology services, or breaches of information security, could have a negative effect on the Company's
assets, performance and earnings, as well as on the Company's reputation. The significance of any such event is difficult to
quantify but may in certain circumstances be material and could have a material adverse effect on the Company’s business,
financial condition and results of operations.
Environmental regulation and performance
The Calima Group’s operations were subject to Canadian Federal and Provincial environmental regulations. These
regulations govern the Company’s exploration, development and production of oil and gas reserves in the Western
Canadian Sedimentary Basin. The regulations include, among other things, standards for emissions management,
hydrocarbon handling and spill response as well as reclamation and abandonment requirements. Compliance with
applicable standards is addressed through regular monitoring by the Company and through external audits conducted by
regulatory authorities and consultants of Calima. There were no significant breaches of environmental regulations during
the year ended 31 December 2024.
Events after the reporting period
The following events occurred subsequent to the year ended 31 December 2024:
•
The Company has lodged a notice of meeting to approve a capital return of 1.2 cents per share (~$5.45 million)
anticipated to be paid in mid-April 2025
Since the year ended 31 December 2024, the Directors are not aware of any other matter or circumstance that has
significantly or may significantly affect the operations of the Company that has not already been disclosed in this Annual
Report.
Likely developments and expected results
For 2025, the Calima Group is looking for new project acquisitions.
Dividends
No dividend has been paid or declared by the Company to shareholders since the end of the financial year. The Company
may elect to pay future dividends during financial periods when it is considered appropriate to do so.
Stock options and performance rights
Equity compensation arrangements
As at 31 December 2024
Number
of unit
holders
Number of
unlisted
units
(thousands)
Date of
expiry
Unlisted options – exercisable at $0.1838 per share (employees)
15
7,827
May 2026
Unlisted options – exercisable at $0. 1838 per share (employees)
3
612
Jan 2027
Unlisted options – exercisable at $0.1438 per share (service provider-fully vested)
1
1,500
Oct 2025
Class F Performance rights – 2022 grant
3
152
Jun 2026
Additional details regarding the Company’s outstanding unlisted options and performance rights are included in the
remuneration section of the Director’s report and in the consolidated financial statements for the year ended 31 December
2024.
8
Indemnification of officers and insurance
The Calima Group has indemnified Directors and certain officers against any claims and related expenses which arise
because of work completed in their respective capabilities. The Group has also paid premiums in respect of a contract
insuring all the Directors and Officers of Calima Energy Limited against costs incurred in defending proceedings except for
conduct involving a wilful breach of duty or a contravention of sections 182 or 183 of the Corporations Act 2001, as
permitted by section 199B of the Corporations Act 2001. The total amount of insurance contract premiums paid in the year
was $119,437 (2023: $196,904).
Directors and Key Management Personnel (“KMP”)
The names of the Directors of Calima in office during the financial year were:
Glenn Whiddon
BCom
Executive Chairman
Mr Whiddon has an extensive background in equity
capital markets, banking and corporate advisory, with
a specific focus on natural resources. Mr. Whiddon
holds a degree in Economics and has extensive
corporate and management experience. He is
currently Director of a number of Australian and
international public listed companies in the resources
sector. Mr. Whiddon was formerly Executive
Chairman, Chief Executive Officer and President of
Grove Energy Limited, a European and Mediterranean
oil and gas exploration and development company.
Appointed 2 June 2015
Interest in Securities at 31 Dec. 2024
Direct shares
3,755,842
Indirect shares (1) 28,659,142
Performance rights 60,000
(unvested)
Other directorships held in listed
entities over the last 3 years
Minrex Resources Ltd - since June
2023
Caprice Resources Limited – since
January 2024
Carbine Resources Ltd – since August
2023
Karl DeMong
BSc (Mechanical
Engineering)
Executive Director
Karl is a Canadian oil and gas engineer based in
Calgary. He is an experienced technical advisor in
unconventional and conventional fields both domestic
(in the Brooks and Thorsby areas) and international.
He holds several patents in surface and downhole oil
and gas technologies. Mr. DeMong’s prior roles
include Apache Corporation, QuickSilver Resources
Canada, Inc, Quantum Reservoir Impact, Sabretooth
Energy and Halliburton Drilling Services.
Appointed 1 April 2022 and on 27 July
2023, Karl DeMong was appointed as
President & CEO of Blackspur Oil Corp
and resigned from that role on 22
February 2024
Interest in Securities at 31 Dec. 2024
Direct shares
740,000
Performance rights
20,000
Other directorships held in listed
entities over the last 3 years
None
Mark Freeman
CA, F.Fin
Finance Director & Company
Secretary
A Chartered Accountant with more than 20 years’
experience in corporate finance and the resources
industry. He has experience in strategic planning,
business development, mergers and acquisitions,
North American gas commercialisation, and project
development general management. Mr. Freeman has
worked with a number of successful public resource
companies. A graduate of the University of Western
Australia with a Bachelor of Commerce. Mr. Freeman
also holds a Graduate Diploma in Applied Finance from
the Securities Institute of Australia.
Appointed 23 June 2021
Interest in Securities at 31 Dec. 2024
Indirect shares
3,276,492
Performance rights
72,000
(unvested)
Other directorships held in listed entities
over the last 3 years
Doriemus Energy PLC – since 25.5.22
Grand Gulf Energy Ltd – resigned 8.4.22
Pursuit Minerals Ltd – resigned 31.8.23
Roquefort Therapeutics PLC – resigned
16.9.2022
P.L. (Lonny) Tetley
Blaw, Bcom
Non-Executive Director
Lonny Tetley is a securities lawyer and partner at
Burnet, Duckworth and Palmer LLP with over 15 years
of experience in corporate finance and the oil and gas
industry. Mr. Tetley serves on the Board of a number
of companies including Certarus Ltd., Beyond Energy
Services & Technology Corp. and Accelerate Financial
Technologies Inc. He is also a member of the Private
Funds Independent Review Committee of Deans
Knight Capital Management Ltd.
Appointed 28 May 2021, resigned 28 June
2024
Interest in Securities at 28 June 2024
N/A
Other directorships held in listed entities
over the last 3 years
None
9
Rod Monden
CFO
Mr. Monden is a chartered professional accountant
with 25 years of senior progressive financial
experience in the energy sector, holding such positions
as Manager Financial Reporting, Controller, VP Finance
and CFO, with private and publicly reported companies
in Canada.
Appointed CFO 18 July 2023 resigned 22
February 2024
Interest in Securities at 23 Feb. 2024
N/A
* Glenn Whiddon: Please note that Mr. Whiddon only has a control in 5,791,549 shares in the indirect holdings. Mr. Whiddon does not control the remaining indirect holdings.
They are held independently of Mr. Whiddon and are only included for good corporate governance purposes. Mr. Whiddon has no relevant interest in the indirect holdings.
Director meetings
Directors’
Meetings
Number of meetings held
4
Meeting attendance:
Glenn Whiddon
4 of 4
Karl DeMong
4 of 4
Lonny Tetley
2 of 2
Mark Freeman
4 of 4
Proceedings on behalf of the company
No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of
the Corporations Act 2001.
Non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Company and/or Group are important. Details of the amount paid or payable
to the auditor for services provided during the year are set out in Note 22. For the year ended 31 December 2023, there
were non-audit related services provided by the Company’s auditor, BDO Audit Pty Ltd (“BDO”).
The board of directors are satisfied that the provision of the non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-
audit services by the auditor did not compromise the auditor independence requirements of the Corporations Act 2001 for
the following reasons:
•
all non-audit services have been reviewed by the board to ensure they do not impact the impartiality and
objectivity of the auditor, and
•
none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out
on page 41. No officer or director of Calima belonged to an audit practice that audited the Company during the year.
Rounding of amounts
The Company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the “rounding off” of amounts in
the Director’s Report and the financial report. Amounts in the Director’s Report and half year financial statements have
been rounded off to the nearest dollars in accordance with the instrument unless otherwise specified.
Signed in accordance with a resolution of the Directors.
Glenn Whiddon
Executive Chairman
1 April 2025
10
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
For the year ended 31 December 2024 and 2023
_____________________________________________________
CALIMA ENERGY LIMITED
Consolidated Statement of Profit or Loss and Other Comprehensive Income (Loss)
(Australian dollars)
For the year ended
Notes
31 December
2024
31 December
2023
Continuing operations
Revenue
Interest income
$
1,406,109
$
-
1,406,109
-
Expenses
General and administrative
1,393,220
1,544,603
Financing and interest
5,395
(8,396)
Depletion and depreciation
20,833
-
Share-based compensation
77,574
1,433,285
Foreign exchange loss
118,140
7,809
1,615,162
2,977,301
Net income before income taxes
(209,053)
(2,977,301)
Income tax expense
9
-
-
Net income from continuing operations after tax
(209,053)
(2,977,301)
Net income (loss) from discontinued operations after tax
7
14,021,688
(38,417,371)
Net income (loss)
13,812,635
(41,394,672)
Other comprehensive income (loss)
Items that may be reclassified subsequently to profit and loss
Gain on foreign currency translations continuing operations
20
-
311,000
Gain on foreign currency translations discontinued operations
20
-
3,370,000
Total comprehensive income (loss)
$
13,812,635
$
(37,713,672)
Total comprehensive income for the year attributable to owners of
Calima Energy Limited arises from:
Continuing operations
(209,053)
(2,666,301)
Discontinuing operations
14,021,688
(35,047,371)
Total comprehensive income (loss)
$
13,812,635
$
(37,713,672)
Net income per share from continued operations
Basic
15
$
(0.0003)
$
(0.0048)
Diluted
15
$
(0.0003)
$
(0.0047)
See accompanying notes to the consolidated financial statements.
11
CALIMA ENERGY LIMITED
Consolidated Statement of Financial Position
(Australian dollars)
As at
Notes
31 December
2024
31 December
2023
Assets
Current assets
Cash and cash equivalents
5
$
7,094,442
$ 3,957,653
Accounts receivable
6
40,251
104,023
Deposits and prepaid expenses
95,817
91,291
Assets classified as held for sale
7
-
117,854,668
7,230,510
122,007,635
Non-current assets
Right-of-Use Asset
45,343
230,382
Office assets
68,581
-
Long-term deposits
294,739
617,947
7,639,173
122,855,964
Liabilities
Current liabilities
Accounts payable and accrued liabilities
119,455
371,356
Lease liability - current
16
32,107
-
Liabilities classified as held for sale
7
-
38,874,355
151,562
39,245,711
Non-current liabilities
Lease liability – non-current
16
13,762
-
Restoration provisions
13
-
204,811
165,324
39,450,522
Shareholders’ equity
Share capital
14
277,184,068
358,676,217
Share-based payments
18
22,213,675
22,136,101
Foreign currency translations
20
-
8,329,653
Accumulated losses
(291,923,895)
(305,736,529)
7,473,849
83,405,442
$
7,639,173
$
122,855,964
See accompanying notes to the consolidated financial statements.
12
CALIMA ENERGY LIMITED
Consolidated Statement of Cash Flows
(Australian dollars)
For the year ended
Notes
31 December
2024
31 December
2023
Continuing operations
Operating activities
Net income
$
(209,053)
$
(2,977,301)
Items not affecting operating related cash flows:
Depletion and depreciation
20,833
-
Share-based compensation
18
77,574
1,433,285
Funds flow from operations
(110,646)
(1,544,016)
Changes in non-cash working capital
418,300
(111,244)
Cash provided by (used in) continuing operating activities
307,654
(1,655,260)
Cash provided by discontinued operating activities
7
3,592,847
39,890,181
3,900,501
38,234,921
Financing activities
Return of capital
(79,999,803)
(7,508,649)
Common share buyback
(1,492,345)
-
Cash provided by (used in) continuing financing activities
(81,492,148)
(7,508,649)
Cash provided by (used in) discontinued financing activities
7
(372,000)
(563,969)
(81,864,148)
(8,072,618)
Investing activities
Proceeds from sale of subsidiary-Blackspur
7
82,289,050
-
Proceeds from sale of subsidiary-Calima Canada
7
1,685,002
-
Additions in office assets
(70,743)
-
Cash provided by (used in) continuing investing activities
83,903,309
-
Cash (used in) discontinued investing activities
7
(2,168,346)
(21,822,898)
81,734,963
(21,822,898)
Cash as asset held for sale
7
-
3,328,604
Impact of foreign exchange translations
(634,527)
(7,976,172)
Increase in cash and cash equivalents
3,136,789
3,691,837
Cash and cash equivalents, beginning of year
3,957,653
265,816
Cash and cash equivalents, end of year
5
$
7,094,442
$
3,957,653
See accompanying notes to the consolidated financial statements.
13
CALIMA ENERGY LIMITED
Consolidated Statement of Changes in Equity
For the year ended
Notes
31 December
2024
31 December
2023
Share capital
Balance, beginning of year
$
358,676,217 $
366,054,866
Issuance of common shares on exercise of performance warrants
13
-
130,000
Common shares buyback
13
(1,492,346)
-
Return of capital
13
(79,999,803)
(7,508,649)
Balance, end of year
277,184,068
358,676,217
Share-based payments reserve
Balance, beginning of year
22,136,101
19,413,491
Share-based compensation
18
77,574
2,722,610
Balance, end year
22,213,675
22,136,101
Foreign currency translation reserve
Balance, beginning of year
8,329,653
4,648,000
Other comprehensive income (loss)
20
(8,329,653)
3,681,653
Balance, end of year
-
8,329,653
Accumulated losses
Balance, beginning of year
(305,736,529)
(264,341,857)
Accumulated gain on discontinued operations
14,021,688
-
Net income
(209,053)
(41,394,672)
Balance, end of year
$
(291,923,894) $
(305,736,529)
Shareholders’ equity, beginning of year
$
83,405,442 $
125,774,499
Shareholders’ equity, end of year
$
7,473,849 $
83,405,442
See accompanying notes to the consolidated financial statements.
14
CALIMA ENERGY LIMITED
Notes to the Consolidated Financial Statements
As at and for the year ended 31 December 2024 and 2023
Financial statement notes
Page
1
Nature of business
14
2
Basis of presentation
14
3
Material accounting policies
15
4
Significant accounting judgements, estimates and assumptions
19
5
Cash and cash equivalents
20
6
Accounts receivable
20
7
Assets held for sale and discontinued operations
21
8
Deferred income taxes
23
9
Credit facility
24
10
Risk management contracts
25
11
Term loan
25
12
Restoration provisions
25
13
Share capital
26
14
Per share amounts
26
15
Capital Management
27
16
Commitments and contingencies
27
17
Segment information
28
18
Share-based compensation
28
19
Related party transactions
29
20
Other comprehensive income
29
21
Auditor Remuneration
30
22
Supplemental cash flow information
30
23
Parent company financial information
31
24
Investment in controlled entities
31
25
Financial Risk Management
31
1. NATURE OF BUSINESS
Calima Energy Limited (“Calima” or the “Company”) was incorporated under the Australian Corporations Act 2001. The
principal activity of the Calima is investing in oil and gas exploration and production projects internationally and more
specifically in Canada.
Calima’s Australian head office is domiciled at Unit 103, 28 Station St, Cottesloe, WA 6011. Calima’s voting common shares
was previously publicly traded on the Australian Stock Exchange under the symbol “CE1” and on the OTC under the symbol
“CLMEF” until 18 December 2024. The Company formally applied for removal from the ASX official list on September 13,
2024. As a result, it was delisted from the Australian Stock Exchange on December 18, 2024. These audited consolidated
financial statements for the year ended 31 December 2024 (the “annual financial statements”) were approved and
authorised by Calima’s Board of Directors on 1 April 2025.
2. BASIS OF PRESENTATION
These general-purpose financial statements consist primarily of the financial records of Calima and its two previously wholly
owned Canadian subsidiaries, Blackspur Oil Corp. (“Blackspur”) and Calima Energy Inc. (the “Calima Group”). Blackspur was
sold with an effective date of 23 February 2024 and its share of revenue and expenses for that period are consolidated into
the accounts. Calima Energy Inc. was sold with an effective date of 22 October 2024 and its share of revenue and expenses
for that period are consolidated into the accounts. All intercompany transactions have been eliminated.
These annual financial statements have been prepared in accordance with Australian Accounting Standards and
interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. Compliance with
Australian Accounting Standards ensures that these annual financial statements comply with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Consequently, these annual
financial statements are compliant with IFRS. Calima is a for-profit entity for the purposes of preparing the financial
statements. The statements have been prepared on a historical cost basis except for certain financial instruments which
are measured at their estimated fair market value. These annual financial statements follow the same accounting policies
that were utilised to prepare the audited consolidated financial statements for the year ended 31 December 2023.
15
The functional currency of Calima is the Australian dollar and the functional currency of both Blackspur and Calima Energy
Inc. is the Canadian dollar. All amounts reported have been in presented in Australian dollars (A$ or AUD) unless otherwise
noted. References to C$ denotes Canadian dollars and US$ denotes United States dollars.
3. MATERIAL ACCOUNTING POLICIES
Oil and natural gas assets
Oil and natural gas assets are measured at historical cost less accumulated depletion, depreciation and impairment (net of
reversals). The Company begins capitalising oil and natural gas exploration costs after the right to explore has been obtained
and includes land acquisition costs, geological and geophysical activities, drilling expenditures and costs incurred for the
completion and testing of exploration wells. The Calima Group capitalises all subsequent investments attributable to the
development of its oil and natural gas assets if the expenditures are considered a betterment and provide a future benefit
beyond one year. The Company's capitalised costs primarily consist of pad construction, drilling activities, completion
activities, well equipment, processing facilities, gathering systems, pipelines and employee costs directly attributable to
development.
Capitalised costs are classified as exploration and evaluation assets (“E&E”) if technical feasibility and commercial viability
have not yet been established. Technical feasibility and commercial viability are generally deemed to exist when proved
and probable reserves are present. Generally, the acquisition of undeveloped mineral leases are initially capitalised as E&E
assets and will be expensed if the lease expires, becomes impaired or management determines that no further exploration
or evaluation activities are expected on the lease prior to expiry. If technical feasibility and commercial viability of E&E
assets are established, the E&E assets are tested for impairment and reclassified to property, plant and equipment
(“PP&E”). Costs are capitalised directly as PP&E if they are attributable to the development of oil and natural gas reserves
after technical feasibility and commercial viability have been achieved.
The majority of PP&E is depleted using the unit-of-production method relative to the Company's estimated total
recoverable proved plus probable reserves. For the purposes of the depletion calculation, natural gas reserves and
production are converted to barrels of oil equivalent based upon the relative energy content (6:1). The depletion base
consists of the historical net book value of capitalised costs, plus the estimated future costs required to develop the
Company's estimated recoverable proved plus probable reserves. The depletion base excludes E&E and the cost of assets
that are not yet available for use in the manner intended by Management.
Impairment
The Calima Group reviews its E&E and PP&E for indicators of impairment at each reporting period. For the purposes of the
review, the Company’s assets are grouped into cash-generating units ("CGUs") which are defined as the smallest group of
assets generating cash inflows that are largely independent from the cash inflows of other asset groups. The Calima Group’s
PP&E are currently held in two CGUs (Brooks and Thorsby). The majority of the Company’s E&E assets are held in one CGU
(Tommy Lakes Montney E&E). If impairment indicators exist, the CGU is tested for impairment and a loss is recognised to
the extent that the carrying amount exceeds its estimated recoverable value.
The recoverable amount of the CGU is determined as the greater of its fair-value-less-costs-of-disposal ("FVLCOD") and its
value-in-use ("VIU"). FVLCOD is based on the estimated recoverable amount from the sale of an asset or CGU in an arm’s
length transaction between knowledgeable parties, less the cost of disposal. In assessing VIU, the estimated future cash
flows of the CGU are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money, risks specific to the asset and overhead costs associated with operating the CGU.
The recoverable amount of the Calima Group’s CGUs is generally based on after-tax discounted future cash flows from the
Company’s proved plus probable reserves, contingent resources or by observable third-party land transactions adjacent to
the Company's assets (Level 3 valuations). Key assumptions used to determine the recoverable amount of the CGUs include
production rates, future commodity prices, discount rates and future royalty, operating and capital costs.
Following the recognition of an impairment loss, the Company reviews its CGU for indicators of impairment reversal at each
subsequent reporting period. If there is observable evidence that the value of the CGU has increased significantly since the
previous impairment loss, Calima performs a test for impairment reversal by comparing an updated estimate of the CGU’s
recoverable amount to its current carrying amount. If the Company concludes that there has been a material and
substantive change in the estimates used to assess the CGU’s recoverable amount, an impairment loss will be reversed to
the extent that the recoverable amount exceeds its carrying value, less the incremental value of depletion and depreciation
that otherwise would have been recognised by the Company, had the impairment loss not previously occurred.
16
Financial Instruments
The Company's financial instruments consist of cash and cash equivalents, accounts receivable, deposits, risk management
contracts, accounts payable, accrued liabilities, other indebtedness, investments, a term loan and a credit facility. The
Calima Group’s financial instruments are measured on the consolidated statement of financial position at either fair market
value or amortised cost. The carrying value of the Company's financial instruments generally approximate their fair market
value.
The fair value measurement of the Company's financial instruments are classified according to the following hierarchy
which is ranked based on the amount of publicly observable inputs available to value the instruments:
Level 1 - Quoted prices that are available in active markets for identical assets or liabilities at the reporting date
Level 2 - Values are based on various inputs, including quoted forward prices for commodities, time value of money
and volatility factors, which are observed in the marketplace but are not readily observable in an actively traded market
Level 3 - Valuation inputs that are not based on observable market data
The following table summarises the method by which the Calima Group measures its financial instruments on the
consolidated statement of financial position and the corresponding hierarchy rating for their derived fair value estimates:
Financial Instrument
Fair value
Hierarchy
Classification &
Measurement
Cash and cash equivalents
Level 1
Amortised cost
Accounts receivable
Level 2
Amortised cost
Deposits
Level 2
Amortised cost
Accounts payable and accrued liabilities
Level 2
Amortised cost
Credit facility
Level 2
Amortised cost
Risk management contracts
Level 2
FV through profit and loss
Term loan
Level 3
Amortised cost
The Calima Group’s risk management contracts are measured at fair market value at each reporting period. Realised gains
and losses from the settlement of risk management contracts as well as unrealised gains and losses from the
remeasurement of these financial instruments to fair market value at each reporting period are recognised in net income
(loss) as incurred. Transaction costs related to fair value through profit and loss financial instruments are immediately
expensed. Financial instruments recognised at amortised cost are accreted through net income (loss) towards their
settlement value over time. Transaction costs related to financial liabilities measured at amortised costs are initially
capitalised and then amortised to net income (loss) over the life of the related host instrument.
Any impairment loss of financial assets is determined by assessing and measuring the expected credit losses of the
instruments at each reporting period. The Calima Group measures expected credit losses using a lifetime expected loss
allowance model for all trade receivables and contract assets. The credit-loss model groups receivables based on similar
credit risk characteristics and the number of days past due in order to estimate and recognise bad debt expenses. When
measuring expected credit losses, the Company considers a variety of factors including evidence of the debtor's financial
condition, history of collections, the term of the receivable and any changes in economic conditions.
Foreign currency translations
With respect to transactions and balances of the Calima Group that are denominated in a foreign currency other than their
respective functional currency, monetary assets and liabilities are translated at the exchange rate in effect at the statement
of financial position date. Revenues and expenses are translated at the average foreign exchange rates during the period.
Non-monetary items are translated at the foreign exchange rate in effect at the historical date of their last fair value
measurement. The corresponding realised and unrealised gains and losses from these foreign currency translations are
recognised in net income (loss) as incurred.
For financial reporting purposes, the presentation currency of the Calima Group is the Australian dollar. Accordingly, the
Canadian dollar functional currencies of Blackspur and Calima Energy Inc. are translated to the Australian dollar
presentation currency upon consolidation. Revenues and expenses are translated at the average exchange rate during the
year and assets and liabilities are translated at the prevailing exchange rates at the reporting date.
The corresponding unrealised gains and losses stemming from the remeasurement of the subsidiary functional currencies
to the presentation currencies at each reporting period are recognised as other comprehensive income by Calima. The
corresponding cumulative foreign currency translation reserve is reflected in shareholder’s equity on the consolidated
statement of financial position until such time the subsidiary is disposed of, at which point, the balance is reclassified to net
income (loss).
17
Revenue recognition
Revenues primarily relate to the sale of oil, natural gas and natural gas liquids ("NGLs") in Canada from the Company's
Brooks and Thorsby assets. The products are classified and presented in the financial statements based on the physical
characteristics of the hydrocarbons at the time of sale. Liquids extracted from the natural gas stream are presented as
NGLs.
The Calima Group measures revenue from the sale of oil, natural gas and NGLs at the amount the Company expects to
receive, which is based on an agreed upon transaction volume and price with the customer. Revenue is recognised when
the Calima Group transfers control of products or provides services to a customer at the amount to which the Company
expects to receive. If the consideration includes a variable component, the Group estimates the amount of the expected
consideration receivable. Variable consideration is estimated throughout the contract and is constrained until it is highly
probable a significant revenue reversal in the amount of cumulative revenue recognised will not occur. In most cases,
revenue is recognised when the hydrocarbons have been delivered to the customer. Payment terms with the Company's
customers are generally within 30 days following the month of product delivery.
The Calima Group recognises realised and unrealised gains and losses from the Company’s risk management contracts
which are remeasured to fair market value at each reporting period (refer to the financial instruments accounting policy).
The Company also earns other income primarily from interest on its cash and cash equivalent balances held. Excluded from
revenues are amounts received in respect of government grants and subsidies that are instead reflected as a reduction to
the related expenditure to which the recoveries are intended to compensate.
Provisions
Provisions are liabilities that are recognised when the Calima Group has a present legal or constructive obligation as a result
of a past event and it is probable that the Company will be required to settle the obligation. The Calima Group’s provisions
primarily consist of restoration provisions associated with the dismantling, decommissioning and site disturbance
remediation activities for the Company's oil and natural gas assets.
At initial recognition, the Company recognises a restoration provision asset and corresponding liability on the statement of
financial position. Restoration provisions are measured at the present value of expected future cash outflows required to
settle the obligations. Restoration provisions are inflated based on the Bank of Canada's target inflation rate and then
discounted to net present value using a risk-free discount rate. The liabilities are accreted upwards towards their estimated
settlement value over the expected life of the assets in order to reflect the time value of money. Restoration provision
assets are depleted over the remaining useful life of the related assets in order to reflect the associated decommissioning
costs in net income (loss) over time. Restoration provision assets and liabilities are remeasured at each reporting period
primarily to account for any changes in estimates or discount rates. Actual expenditures incurred to settle the obligations
reduce the liability.
Income taxes
The Calima Group’s income taxes primarily relate to deferred income taxes that are recognised in respect of the Company’s
earnings, which are expected in future years under the Income Tax Act (Canada) and Income Tax Assessment Act (Australia).
Deferred income tax assets and liabilities are recognised on temporary differences between the current carrying value of
assets and liabilities for financial reporting purposes and their corresponding tax values. Deferred income taxes are
determined on an undiscounted basis using tax rates that have been enacted or substantively enacted and that are
expected to apply in future years when the temporary differences reverse. A deferred tax asset is only recognised to the
extent that it is probable that future taxable profits will arise, such that the available carry-forward tax deduction can be
utilised to shelter the taxable profits from income tax. The recoverability of deferred tax assets is assessed by comparing
the Calima Group’s tax pools to the future undiscounted cash flows from the Company's proved plus probable reserves,
less estimated financing and general and administrative expenses.
Income taxes are recognised in the statement of comprehensive income, except when they relate to share capital, in which
case, the taxes are recognised directly in shareholders equity. Current income tax expense (recovery) is the expected cash
tax payable or receivable on the Company's taxable income (loss) during the year, using tax rates that have been enacted
or substantively enacted.
Stock-based compensation
The Calima Group’s stock-based compensation expense primarily relates to stock options and performance rights that are
granted to employees, service providers and directors of the Company.
Grants issued under the Company’s plans are initially measured at their estimated fair market value and are expensed over
the vesting periods under the terms of the compensation arrangement. Upon exercise, the plans allow the holder of an
award to receive common shares or cash at the Company's discretion. The Company’s plans are all accounted for as equity-
18
settled share-based compensation arrangements based on their anticipated settlement option. Accordingly, when equity
compensation units are exercised or released, any consideration received, together with the expense previously recognised
as contributed surplus, is recorded as an increase to share capital.
The primary non-market-based vesting condition for all the Company's stock-based compensation plans is generally
continuous employment. An estimated forfeiture rate is applied to the valuation of the equity units over the vesting period
and is subsequently adjusted to reflect the actual number of equity awards that ultimately vest. In some cases, performance
rights are also granted with certain other market-based or non-market-based vesting conditions which are determined by
the Company's Board of Directors. The fair market value of these performance rights at the date of grant is initially adjusted
to reflect the probability of these possible outcomes.
Stock options and performance rights are valued at the date of grant primarily utilising a Black-Scholes pricing model.
Performance rights that are subject to a minimum share price vesting condition are valued utilising a binomial barrier pricing
model. Performance rights that vest immediately at issuance are valued at the Company's share price at the date of grant.
The stock-based compensation expense attributable to performance factors that are dependent upon market conditions
are not subsequently adjusted for actual results. The stock-based compensation expense attributable to performance
factors dependent upon non-market conditions are subsequently adjusted for actual results.
Leases
At the inception of a contract, the Calima Group assesses if an agreement contains a lease based on whether the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. For all in-scope
lease arrangements, a right-of-use asset and corresponding lease liability is initially recognised at the commencement date
of the lease and measured at the net present value of all future non-cancellable lease payments. The payments are
discounted using the rate implicit in the lease unless that rate is not readily determined, in which case, the Company's
incremental borrowing rate is utilised. The estimated lease term consists of all non-cancellable periods under the contract
and includes periods covered by an extension or termination option if the Calima Group is reasonably certain that it will
exercise the option.
Right-of-use assets are depreciated to net income (loss) over the expected utilisation period of the underlying assets using
the straight-line method. The depreciation of right-of-use assets that are utilised in respect of development activities are
initially capitalised to PP&E and then depleted to net income over the remaining life of the developed assets once they are
ready for use in the manner intended. Lease liabilities are accreted upwards toward their settlement value over the
expected life of the contract in order to reflect the cost of borrowing under the indebted contract. The interest portion of
the lease payment is recognised as an operating activity in the consolidated statement of cash flows. The principal portion
of the lease payment reduces the lease liability and is reflected as a financing activity in the consolidated statement of cash
flows. Right-of-use assets and lease liabilities are remeasured at each reporting period to reflect any contract modifications
or reassessments that impact the anticipated remaining cash outflows under the contract.
Jointly operated assets
The Calima Group’s oil and natural gas activities include jointly operated oil and natural gas assets and liabilities. These
annual financial statements only include the Company’s share of these jointly operated assets and liabilities and a
proportionate share of the related revenue and expenses.
Per share information
Basic per share information is calculated using the weighted average number of common shares outstanding during the
year. Diluted per share information is calculated using the basic weighted average number of common shares outstanding
during the year, adjusted for the number of shares which could have had a dilutive effect on net income during the year
had outstanding in-the-money equity compensation units been exercised.
Assets Held for Sale
PP&E and E&E assets are classified as held for sale if it is highly probable their carrying amounts will be recovered through
a capital disposition rather than through future operating cash flows. Before PP&E and E&E assets are classified as held for
sale, they are assessed for indicators of impairment or reversal of previously recorded impairments and are measured at
the lower of their carrying amount and fair value less costs of disposal. Any impairment charges or reversals are recognized
in net income. Assets held for sale are classified as current assets and are not subject to DD&A. Decommissioning liabilities
associated with assets held for sale are classified as current liabilities.
19
4. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
Significant judgements
Oil and natural gas assets
Oil and natural gas assets are grouped into CGUs based on their ability to generate largely independent cash flows. The
determination of the Calima Group’s CGUs are subject to judgment as the Company is required to define and establish
these asset groupings based on their specific nature and characteristics in a reasonable manner. The Calima Group applies
judgment when determining the classification of its oil and natural gas assets as either E&E or PP&E assets because it
requires the Company to define and establish thresholds for when a particular project has achieved technical feasibility and
commercial viability. When the Calima Group assesses its CGU for indicators of impairment or impairment reversal at each
reporting period, judgment is applied in establishing the qualitative and quantitative thresholds that are used to assess if
an indicator is present, such that an impairment test is then required.
Liquidity and access to Credit Facility and Term Loan
As at 31 December 2024, the Calima Group’s net debt was nil (Note 16). The Company also had a net working capital surplus
of $7.1 million (current assets of $7.2 million in excess of current liabilities of $0.1 million).
Borrowings under the Credit Facility incur interest at a market-based interest rate plus an applicable margin which varies
depending on Blackspur’s net debt to cash flow ratio. As a demand facility, the Credit Facility does not have a specific
maturity date which means that the lender could demand repayment of all outstanding indebtedness or a portion thereof
at any time. If such an event were to occur, the Calima Group would be required to source alternative sources of capital or
sell assets to repay the indebtedness.
Other significant judgements
The determination of the Company’s income tax and royalty expenses require interpretation of complex laws and
regulations and are subject to judgement. Judgement is also applied when interpreting contractual commitments to assess
whether or not they contain a lease arrangement.
Significant estimates
Depletion of oil and natural gas assets
Amounts recorded for the depletion of oil and natural gas assets rely on estimates and assumptions regarding the
Company's proved plus probable reserves and future development costs. Fair value estimates that are utilised in a test for
impairment or impairment reversal often rely upon estimates and assumptions regarding the future cash flows from the
Calima Group’s proved plus probable reserves as well as the recoverable resale value of undeveloped exploratory acreage.
Reserve estimates are primarily based on the Calima Group’s reserve reports prepared by an independent third-party
engineering firm. The reports include estimates for production rates, future commodity prices, discount rates, and future
royalty, operating and capital costs. These estimates were prepared by experts in accordance with the standards contained
in the Canadian Oil and Gas Evaluation Handbook but are still subject to measurement uncertainty. The Calima Group may
also utilize observable third-party land transactions adjacent to the Company's assets for estimating the value of
undeveloped exploration acreage. Actual results may differ from the Company's estimates.
Other significant estimates
Estimates and assumptions are utilised to assess the Company’s ability to continue as a going concern which includes future
cash flow projections for operating, investing and financing related activities. The value of the Company's restoration
provisions is based on estimates and assumptions regarding current legal requirements, future costs to settle the provisions
and the expected timing of the remediations. The valuation of level 2 and level 3 financial instruments are subject to
measurement uncertainty because there is no observable actively traded market and, therefore, estimates are required to
estimate their fair market value at each reporting period for the purposes of valuation or disclosure.
The Company records deferred income tax assets and liabilities using income tax rates that are enacted or substantively
enacted at the statement of financial position date, which are subject to change. The recoverability of loss carryforwards,
investment tax credits and royalty incentives require estimates and assumptions regarding future operating results that will
allow the Company to ultimately utilize those assets. All tax filings are also subject to audit and potential reassessment.
The Calima Group's stock-based compensation expense is subject to measurement uncertainty as a result of estimates and
assumptions related to volatility, forfeiture rates, expected life, market-based vesting conditions and non-market-based
20
vesting conditions. Estimates and assumptions are utilised in the Company's cash flows forecasts in assessing the Company’s
ability to continue as a going concern, future cash flows and access to credit.
5. CASH AND CASH EQUIVALENTS
As at 31 December 2024, the Calima Group held cash and cash equivalents of $7.1 million (31 December 2023 - $4.0 million).
The Company is exposed to credit risk associated with its cash and cash equivalent balances held by third party institutions.
The credit risk associated with the Calima Group’s cash and cash equivalents was considered low as the Company’s balances
were all held with National Australia Bank (AA rating) located in Australia.
6. ACCOUNTS RECEIVABLE
As at (A$)
31 December
2024
31 December
2023
Oil and natural gas sales
$
-
$
33,886
GST and other
40,251
70,137
Accounts receivable
$
40,251
$
104,023
The Calima Group is exposed to collection risk from receivables associated with the Company’s oil and natural gas sales.
The customer base primarily consists of integrated oil and natural gas producers, midstream and downstream companies
and energy traders. The Company manages credit risk by principally transacting with high-quality counterparties.
As at 31 December 2024, credit risk from outstanding accounts receivable was considered low given the history of
collections and because the majority of the Company’s outstanding receivables from oil and natural gas sales were held
with four investment-grade counterparties. Substantially all of the Company’s accounts receivable from oil and natural gas
sales were collected within 30 days following the month of sale or settlement date and there were no material amounts
past due as at 31 December 2024 or 2023.
7. ASSETS HELD FOR SALE AND DISCOUNTINUED OPERATIONS
Sale of Blackspur Oil Corp.
On 27 December 2023, Calima announced it has entered into a binding definitive agreement with Astara Energy Corp.,
pursuant to which Calima had agreed to sell 100% of its ownership in its wholly owned Canadian subsidiary, Blackspur Oil
Corp., the owner of the Company’s Brooks and Thorsby production assets for a cash consideration of ~A$83.3 million (C$75
million) prior to customary completion adjustments for net debt. The transaction closed 23 February 2024. Calima received
cash proceeds of C$72.7 million (A$82.6 million) before income tax.
Financial information relating to the discontinued operations for the year ended 31 December 2024 and prior year ended
31 December 2023 are set out below. The 12-month period ended 31 December 2023 were included in the year end 2023
financial statements. At 31 December 2023, the Blackspur subsidiary was stated at fair value less costs to sell and comprised
the following assets and liabilities. The assets and liabilities were reclassified as held for sale in relation to the discontinued
operations of Blackspur as at 31 December 2023. The purchase price equation was finalized in the first quarter of 2024.
As at
23 February
2024
Assets classified as held for sale
$
Property, plant and equipment
104,366,088
Other assets
2,362,714
Inventory
1,009,963
Accounts receivable
9,010,752
Cash
4,626,442
Total Assets of Blackspur held for sale
$
121,375,959
Liabilities classified as held for sale
Accounts payable
13,524,866
Risk management contracts
-
Term loan
3,447,055
Asset retirement obligation
21,832,000
Total Liabilities of Blackspur held for sale
$
38,803,921
Net assets of Blackspur held for sale
82,572,038
21
The net income from the Blackspur assets generated net income of $2.6 million, net of income tax expenses of $1.4 million.
The cumulative foreign exchange translation equity balance is reversed into the statement of earnings in the current period,
resulting in a net income of $11.3 million.
An impairment loss of $45.7 million was recorded in the 31 December 2023 financial year to reduce the carrying amounts
of property, plant and equipment within the disposal group to the lower of the carrying amount and the fair value less costs
to sell. Following the sale of the assets, the net proceeds for year ended 31 December 2023 to 23 February 2024 resulted
in a reversal of $2.2 million.
For the year ended
31 December
2024
31 December
2023
Revenue (point in time)
$
$
Oil and natural gas sales
9,995,030
92,263,761
Royalties expense
(1,497,237)
(19,195,447)
8,497,793
73,068,314
Risk management contracts
Realized gain (loss)
150,895
(623,334)
Unrealized gain
-
1,691,105
8,648,688
74,136,085
Expenses
Operating
2,204,198
26,410,238
Transportation
775,726
4,913,059
Depletion and depreciation
2,254,000
21,274,261
Impairment (reversal)
(2,216,270)
45,684,240
General and administrative
1,152,753
7,139,063
Share-based compensation
-
1,309,880
Financing and interest
47,652
611,872
Accretion expense
-
661,769
4,218,059
108,004,382
Net income (loss) before the following
4,430,629
(33,868,297)
Foreign exchange cumulative translation gain
9,743,776
-
Loss on equity investment
-
(4,167)
Net income (loss) before income taxes
14,174,406
(33,872,464)
Income tax expense-current*
-
-
Income tax expense-deferred
-
2,104,389
Net income (loss)-discontinued operations
$
14,174,406
$
(35,976,853)
* The tax obligation previously accrued as at 30 June 2024 of $1,418,625 has been eliminated due to the offset of losses following the Calima Energy Inc
sale.
For the year ended
Notes
31 December
2024
31 December
2023
Operating activities
Net income (loss)
$
14,174,406 $
(35,976,853)
Items not affecting operating related cash flows:
Depletion and depreciation
2,254,000
21,274,261
Impairment (reversal)
(2,216,270)
45,684,240
Unrealised (gain) on risk management contracts
11
-
(1,691,105)
Deferred income tax expense
9
-
2,104,389
Share-based compensation
19
-
1,309,880
Accretion of liabilities
-
661,769
Unwinding of cumulative foreign exchange effect
(9,743,776)
-
Non-cash expenses
-
43,280
Funds flow from operations
4,468,359
33,409,861
Changes in non-cash working capital
(913,766)
(1,678,626)
Cash provided by operating activities
3,554,593
31,731,235
Financing activities
Repayment of credit facility
10
-
(4,033,324)
Repayment of term loan
12
(372,000)
(430,138)
Cash provided by (used in) financing activities
(372,000)
(430,138)
Investing activities
22
Investments in oil and natural gas assets
8
(1,504,129)
(22,232,310)
Loss on equity investment
-
(4,167)
Changes in non-cash working capital
(869,197)
(8,744,178)
Cash provided by (used in) investing activities
(2,373,326)
(30,980,655)
Impact of foreign exchange translations
74,175
208,185
Sale of Calima Energy Inc. (“Calima Canada”)
On 10 September 2024, the Company announced a binding definitive agreement to sell 100% of its ownership in Calima
Energy Inc. (“Calima Canada”). The sale was closed on October 22, 2024. Calima received cash proceeds of AUD$1.7 million.
Financial information related to the discontinued operations for the year ended 31 December 2024 and the prior year
ended 31 December 2023 are set out below.
At 22 October 2024, the Calima Canada subsidiary was stated at fair value less cost to sell and comprised the following
assets and liabilities. The assets and liabilities were reclassified as held for sale to the discontinued operations as at 30 June
2024. The purchase price was finalized in the fourth quarter of 2024.
As at
22 October
2024
Assets classified as held for sale
$
Property, plant and equipment
1,503,645
Accounts receivable
33,424
Prepaids and deposit
382,257
Cash
21,090
Total Assets of Calima Canada held for sale
$
1,940,416
Liabilities classified as held for sale
Accounts payable
29,840
Asset retirement obligation
200,900
Total Liabilities of Calima Canada held for sale
$
230,740
Net assets of Calima Canada held for sale
$
1,709,676
For the year ended
31 December
2024
31 December
2023
Revenue (point in time)
Oil and natural gas sales
$
438,623
$
1,102,979
Other income
70,762
-
Royalties expense
(24,774)
(50,579)
484,611
1,052,400
Expenses
Operating
90,967
264,304
Transportation
56,329
35,694
Depletion and depreciation
5,130
264,644
Financing and Interest
5,596
(36,142)
Accretion expense
4,547
66,840
General and administrative
220,808
248,854
Loss on sale
253,952
-
637,329
844,194
Net (loss) profit before the following
(152,718)
208,206
Foreign exchange cumulative translation gain
-
Net (loss) profit before income taxes
(152,718)
208,206
Income tax expense
-
-
Net (loss) profit – discontinued operations
$
(152,718)
$
208,206
For the year ended
Notes
31 December
2024
31 December
2023
Operating activities
Net (loss) profit
$
(152,718) $
208,206
Items not affecting operating related cash flows:
Depletion and depreciation
5,130
264,644
Accretion of liabilities
4,547
66,840
Non-cash expenses and other
253,952
-
23
Funds flow from operations
110,911
539,690
Changes in non-cash working capital
(72,657)
(164,894)
Cash provided by operating activities
38,254
374,796
Financing activities
Repayment of leases
-
(133,831)
(Repatriation) contribution of capital
12
(3,777,828)
(5,799,338)
Cash (used in) financing activities
(3,777,828)
(5,933,169)
Investing activities
Investments in oil and natural gas assets
8
-
(2,050,732)
Change in long-term deposit
204,980
-
Proceeds from disposition of assets
-
11,208,491
Cash provided by investing activities
204,980
9,157,759
Impact of foreign exchange translations
227,080
(348,006)
Change in cash in the period
(3,307,514)
3,251,380
8. DEFERRED INCOME TAXES
31 December
2022
Change in
tax position
31 December
2023
Change in
tax position
31 December
2024
Non-capital losses
29,343,000
(21,415,000)
7,928,000
(1,784,000)
6,144,000
Oil and natural gas assets
(11,448,000)
13,001,000
1,553,000
(1,553,000)
-
Restoration provisions
6,993,000
(9,529,000)
(2,536,000)
2,536,000
-
Investments
583,000
476,000
1,059,000
(1,059,000)
-
Risk management contracts
(65,000)
65,000
-
-
-
Share issuance costs
1,145,000
-
1,145,000
-
1,145,000
Tax credits and other
809,000
(940,000)
(131,000)
131,000
-
27,360,000
(18,342,000)
9,018,000
(1,729,000)
7,289,000
Unrecognised deferred tax assets
(23,348,000)
14,330,000
(9,018,000)
1,729,000
(7,289,000)
Deferred income tax asset
4,012,000
(4,012,000)
-
-
-
As at 31 December 2024, the Calima Group did not recognize any deferred income tax asset. In 2024, Calima sold its wholly
owned subsidiaries Blackspur Oil Corp. and Calima Energy Inc., which contained majority of the tax pools. At 31 December
2024, the Calima Group held unrecognised deferred income tax assets of $7.3 million (31 December 2023 - $9.0 million)
consisting primarily of carry-forward tax losses held by Calima Energy Limited of 20.5 million with no expiries.
The following table reconciles the change in the deferred income tax asset during the years ended 31 December 2024 and
31 December 2023:
Continuity schedule
31 December
2024
31 December
2023
Deferred income tax asset, beginning of year
$
-
$ 4,012,000
Deferred income tax expense recognised through profit or loss
1,729,000
(2,104,000)
Deferred income tax asset disposed in the year
(1,729,000)
(1,656,000)
Impact of foreign exchange translations
-
(252,000)
Deferred income tax asset, end of year
$
-
$
-
24
The following table reconciles the Company’s consolidated income tax expense (recovery) compared to that computed
using the current effective Australian tax rate of 30% (31 December 2023 – 30%):
For the year ended
31 December
2024
31 December
2023
Net income (loss) from continuing operations before income taxes
$
(209,053)
$
(2,977,301)
Net income (loss) from discontinuing operations before income taxes
14,021,688
(38,417,371)
13,812,635
(41,394,672)
Statutory income tax rate
30%
30%
Expected income tax expense (recovery)
4,143,791
(12,418,402)
Adjustments related to the following:
Change in unrecognised deferred income tax assets
1,729,000
12,889,000
Foreign rate differential
(966,685)
824,000
Share-based compensation
23,272
429,986
Impact of foreign exchange translations and other
(4,929,178)
379,402
Deferred income tax expense (recovery)
$
-
$
2,103,986
Tax loss carry forwards by jurisdiction
31 December
2024
31 December
2023
Canada
$
- $ 33,045,000
Australia
20,481,000
20,359,343
Total non-capital tax losses
$
20,481,000
$
53,404,343
As at 31 December 2024, the Company had estimated non-capital losses (“NCL”) that may be applied to reduce future
taxable income in Australia of $20,481,000 which can be carried forward indefinitely. Non-capital losses in Canada of
$36,939,000 (31 December 2023 of 33,045,000 was disposed through the sale of Calima Canada with expiries starting 2032
to 2043. The Company has available cost base in Canada of $44 million to offset capital gains.
9. CREDIT FACILITY
As at
Financial
Covenant
31 December
2024
31 December
2023
Credit facility details:
Credit facility draws
$
-
$
-
Issued letters of credit
-
152,000
Undrawn capacity
-
22,007,000
Credit facility capacity
$
-
$
22,159,000
Credit Facility maturity date
-
On demand
Effective annual interest rate on revolving draws
-
8.3%
Covenants (1):
Working capital ratio
1:1
-
48.0:1.00
(1)
The Credit Facility contains certain covenants that limit the Company’s ability to, among other things: incur additional indebtedness; create or permit liens to exist; and
make certain dispositions and transfers of assets.
As at 31 December 2024, the Calima Group no longer has a credit facility. This was closed in conjunction with the sale of
Blackspur. As at 31 December 2023, the Calima Group held a C$20 million demand revolving credit facility with a Canadian
chartered bank (the “Credit Facility”). The borrowing base review was completed as at 22 March 2023 and resulted in a
decrease to the credit facility from $24.2M to $20.0M as well as the removal of the affirmative covenant which had a
mandatory hedging requirement if the Company were to utilize the bank line at greater than 50% over any quarter end.
Borrowings under the Credit Facility incur interest at a market-based interest rate plus an applicable margin which varies
depending on Blackspur’s net debt to cash flow ratio. Interest charges are between 150 bps to 350 bps on Canadian bank
prime borrowings and between 275 bps and 475 bps on Canadian dollar bankers’ acceptances. Any undrawn portion of the
demand facility is subject to a standby fee in the range of 20 bps to 45 bps. Security for the credit facility is provided by a
$150 million demand debenture.
Under the terms of the facility, a financial covenant must be maintained. The Company must not permit the working capital
ratio, as defined by the bank, to fall below 1:1. The bank defines the working capital ratio as the ratio of (i) current assets
plus any undrawn availability under the facility to (ii) current liabilities less any amount drawn under the facilities. For the
purposes of the covenant calculation, risk management contract assets and liabilities are excluded. At 31 December 2023,
the Company was in compliance with its banking covenants. Not applicable at 31 December 2024.
25
The following table summarises the change in the Credit Facility during the years ended 31 December 2024 and 31
December 2023:
For the year ended
31 December
2024
31 December
2023
Credit Facility, beginning of year
$
-
$
-
Credit Facility draws
-
(311,376)
Credit Facility repayment
-
311,376
Credit Facility, end of year
$
-
$
-
10. RISK MANAGEMENT CONTRACTS
For the year ended
31 December
2024
31 December
2023
Derivative liability, beginning of year
$
-
$
218,000
Realisation of derivative losses
-
623,000
Net unrealised decrease in fair value
-
1,236,000
Transferred to assets held for sale
-
(2,514,000)
Transferred to liabilities held for sale
-
435,000
Impact of foreign currency translations
-
2,000
Derivative asset (liability), end of year
$
-
$
-
The Company’s risk management portfolio consists of instruments that are intended to mitigate the Calima Group’s
exposure to commodity price risks in the Western Canadian Sedimentary Basin consisting primarily of the US$WTI
benchmark price and the C$ WCS differential to US$ WTI. The net unrealized decrease in fair value is determined using
Level 2 prices sourced from observable data or market corroboration and are measured at mark to market.
Subsequent to 31 December 2023, in support of the Blackspur transaction the Company was required to entered into the
following risk management contracts. These risk management contracts were assumed by Astara through the acquisition
of Blackspur. Thus, there were no risk management contracts post February 2024.
Contract
Reference
Remaining term
Volume
(bbl/day)
Average Price per bbl
CAD$
SWAP
US NGX Oil-WCS-Blended
Apr 2024 - Jun 2024
1,200
($21.90)
SWAP
US NGX Oil-WCS-Blended
Jul 2024 - Sep 2024
1,100
($19.55)
SWAP
US NGX Oil-WCS-Blended
Oct 2024 - Dec 2024
1,000
($22.15)
SWAP
US NGX Oil-WCS-Blended
Jan 2025 - Dec 2025
750
($20.30)
11. TERM LOAN
On 31 January 2022 the Calima Group entered into a long-term financing arrangement with a strategic infrastructure and
midstream company to construct a pipeline connecting the Company’s 02-29 battery in the northern portion of its Brooks,
Alberta asset base to its wells, lands, and gathering system in the southern portion of the asset base. The Calima Group is
the sole owner of the pipeline and will repay the capital costs to construct the pipeline over a term of seven years at a 12%
cost of financing with fixed monthly payments of approximately C$65,000 based on the cost of the pipeline project of C$3.7
million.
As at 31 December 2024, the Calima Group no longer has a term loan as this was closed in conjunction with the sale of
Blackspur.
26
12. RESTORATION PROVISIONS
As at
31 December
2024
31 December
2023
Restoration provision, beginning of year
$
201,528
$
23,311,000
Development of oil and natural gas assets
-
471,000
Accretion
4,547
728,609
Changes in estimate and other
(6,732)
521,000
Transfer to liabilities held for sale (Note 7)
(200,899)
(21,832,000)
Montney Asset disposition (Note 8)
-
(3,659,000)
Impact of foreign exchange translations
1,556
660,919
Restoration provision, end of year
$
-
$
201,528
Presented as:
Current restoration provisions
-
-
Restoration provisions
-
201,528
The Calima Group’s restoration provisions reflect the estimated cost to dismantle, abandon, reclaim and remediate the
Company's oil and natural gas assets at the end of their useful lives. As at 31 December 2024, the total estimated
undiscounted, uninflated cash flows required to settle the Calima Group’s asset retirement obligations was approximately
nil (31 December 2023 – $305 thousand). These liabilities were anticipated to be incurred over the next 15 years.
As at 30 June 2024, the Company used a risk-free rate of 3.0% (31 December 2023 – 3.0%) and an inflation rate of 3.0% (31
December 2023 – 2.0%). Not applicable as at 31 December 2024 as the Calima Group had disposed of all of its oil and gas
interests, thus at year end 31 December 2024, there are restoration provision required.
13. SHARE CAPITAL
31 December 2024
31 December 2023
Equity unit continuity
Shares
Amount
Shares
Amount
Balance, beginning of year
625,720,769 $
358,676,217
611,750,769 $ 366,054,866
Preferred share conversion
7,715,250
-
13,970,000
130,000
Share buyback
(178,996,128)
(1,492,346)
-
-
Return of capital
-
(79,999,803)
-
(7,508,649)
Balance, end of year
454,439,891 $
277,184,068
625,720,769 $ 358,676,217
During the 2024 fiscal year, the Company repurchased common share of 178,996,128 at an average price of $0.0083373
per share for a total of $1.49 million.
On 21 June 2024 shareholders received 12.63 cents per share capital return with a total of $80 million returned to
shareholders.
On 26 March 2024, the Company issued 7,360,000 shares following the exercise of 7,360,000 performance rights to
management and employees of Blackspur Oil Corp. pursuant to the Employee Share Plan. On 14 June 2024, the Company
issued 355,250 shares following the exercise of 355,250 Class F performance rights.
On 25 October 2023, the Company completed a return of capital dividend payment to shareholders of 7.5 million. On 14
March 2023, 1,000,000 performance rights were converted to ordinary shares.
14. PER SHARE AMOUNTS
For the year ended
31 December
2024
31 December
2023
Weighted average number of common shares – basic
631,546,466
617,348,000
Dilutive effect of outstanding equity compensation units
-
12,826,000
Weighted average number common shares - diluted
631,546,466
630,174,000
Net income (loss) from continuing operations
$
(209,053)
$
(2,977,714)
Net income (loss) per share (basic and diluted)
from continuing operations
$
(0.0003)
$
(0.004)
Net income (loss) from discontinued operations
$
14,021,688
$
(38,416,208)
Net income (loss) per share (basic and diluted)
from discontinued operations
$
0.0230
$
(0.06)
27
15. CAPITAL MANAGEMENT
The Calima Group’s objective for managing capital is to maintain a strong statement of financial position in order to provide
financial liquidity to fund ongoing development programs.
The Calima Group manages liquidity risk by complying with debt covenants and designing field development plans in
conjunction with production, commodity price and available credit forecasting which provides the Company with an
opportunity to fund its investments in oil and natural gas assets and expenses within cash flows or available sources of
capital on hand. Calima also manages liquidity risk by preserving borrowing capacity under the Credit Facility.
Management believes the Company has sufficient funding to meet near-term liquidity requirements. On 27 December
2023, Calima announced it has entered into a binding definitive agreement with Astara Energy Corp., pursuant to which
Calima had agreed to sell 100% of its ownership in its wholly owned Canadian subsidiary, Blackspur Oil Corp., the owner of
the Company’s Brooks and Thorsby production assets for a cash consideration of ~A$83.3 million (C$75 million) prior to
customary completion adjustments for net debt. The transaction closed 23 February 2024. Calima received cash proceeds
of C$72.7 million (A$82.56 million). As at 31 December 2024, the Company has cash on hand to assess potential
investments.
The following tables reconciles the Company’s net debt and adjusted funds flow from operations as at 31 December 2024
and 31 December 2023:
As at
31 December
2024
31 December
2023
Long-term portion of term loan
$
-
$
-
Current assets
7,230,510
4,152,967
Other current liabilities
(151,562)
(371,356)
Net (debt) assets
7,078,948
3,781,611
For the year ended
31 December
2024
31 December
2023
Funds flow from operations (per cash flow statement)
$
3,900,501
$
38,234,921
Less: Funds flow from discontinued operations
(3,592,847)
(39,890,181)
Less: Cash related transaction costs
-
-
Adjusted funds flow from (used in) operations
$
(307,654)
$
(1,655,260)
The Company utilises net debt as an important measure to assess the Company's liquidity by incorporating long-term debt,
lease liabilities, the term loan and working capital. Adjusted funds flow from operations is utilised as a measure of
operational performance and cash flow generating capability which impacts the level and extent of funding available for
capital project investments, reduction of net debt or returning capital to shareholders. These measures are also consistent
with the formulas prescribed under the Company’s Credit Facility covenants.
Net debt and adjusted funds flow from operations are not standardised measures and may not be comparable with the
calculation of similar measures by other companies without also taking into account any differences in the method by which
the calculations are prepared.
16. COMMITMENTS & CONTINGENCIES
2025
2026
2027
2028
thereafter
Total
Accounts payable and accrued
liabilities
$
119,455
$
$
-
$
-
$
-
$
119,455
Office lease
32,107
13,762
45,869
Total contractual cash outflows
$
151,562
$
13,762
-
-
-
$
165,324
The accounts payable and accrued liabilities and the term loan are recognised on Calima’s consolidated statement of
financial position.
The Company incurred $70,743 in office assets associated with its corporate office in Australia in 2024. This has been
classified as office assets on the balance sheet. A lease for the office space was entered into on 1 June 2024 with a term of
2 years. Monthly lease costs are $450 net of subleasing arrangement (gross is $1,733 per month) plus outgoings. The lease
has been recognized as a right of use asset on the balance sheet with the corresponding lease liabilities.
28
17. SEGMENT INFORMATION
The Group has identified its operating segments based on the internal management reports that are reviewed and used by
the executive management team in assessing the performance and in determining the allocation of resources. The
operating segments identified by management are based on the geographical locations of the business.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance
of the operating segments, has been identified as the Board. The Group operates as one segment being Oil & Gas Production
and Exploration in Canada.
18. STOCK-BASED COMPENSATION
The following table presents consolidated stock-based compensation for the current year of ($0.18 million), which is made
up of ($0.18 million) to continuing operations and $ nil related to discontinued operations (Note 7).
For the year ended
31 December
2024
31 December
2023
Stock options
$
(175,691)
$
162,000
Performance rights
253,267
2,581,000
Gross stock-based compensation cost
77,574
2,743,000
Capitalised stock-based compensation
-
(1,309,715)
Stock-based compensation expense
$
77,574
$
1,433,285
The following table summarises the changes in equity compensation units during the years ended 31 December 2024 and
2023:
Equity unit continuity
Stock options
Performance rights
Total
Balance, 31 December 2022
17,800,000
29,261,000
47,061,000
Issuance of stock options to other service providers
500,000
-
500,000
Issuance of performance rights to employees
-
8,850,000
8,850,000
Conversion of performance rights to common shares
-
(10,329,000)
(10,329,000)
Forfeitures
-
-
-
Expiry
-
(15,780,000)
(15,780,000)
Balance, 31 December 2023
18,300,000
12,002,000
30,302,000
Conversion of performance rights to common shares
-
(7,715,000)
(7,715,000)
Forfeitures
(5,861,000)
(4,135,000)
(9,996,000)
Expiry
(2,500,000)
-
(2,500,000)
Balance, 31 December 2024
9,939,000
152,000
10,091,000
Stock options
Outstanding
Exercisable
Grant date (1)
Exercise price
(A$/share)
Number of
options
Weighted
average
remaining
life (years)
Number of
options
Weighted
average
remaining
life (years)
2023 grants (Service Providers)
$ 0.0175
1,500,000
0.8
1,500,000
0.8
2022 grants (Employees)
0.0575
612,000
2.1
612,000
2.1
2021 grants
0.0575
7,827,000
1.3
7,872,000
1.3
$ 0.0514
9,939,000
1.3
9,939,000
1.3
(1) All information presented in this table have been adjusted to reflect the impact of the Company’s share consolidation which occurred on August 30, 2021 at a conversion rate of 20:1 (Note 14).
During the year ended 31 December 2023, Calima’s board approved 0.5 million stock options for grant to service providers
of Calima and Blackspur. The primary vesting condition of the stock options is continuous employment or service and 1/3
of the options vest each year over three years and are exercisable at $0.0175 per unit and $0.0575 per unit within five years
from the date of grant.
29
Performance rights
Outstanding
Exercisable
Grant date(1)
Exercise price
(A$/share)
Number of
performance
rights/options
Weighted
average
remaining
life (years)
Number of
performance
rights/options
Weighted
average
remaining
life (years)
2022(2)
-
152,000
0.5
-
-
$
-
152,000
0.5
-
-
1) Units are subject to a market-based and/or non-market based vesting condition.
2) At 31 December 2024 the Company had 152,000 performance class F rights on issue, these securities were tied to continued employment with the Company and would partially vest on 13 June 2025.
During the year ended 31 December 2024, no equity compensation grants were issued. The following existing performance
securities were converted to common shares during the year ended 31 December 2024:
•
355,250 shares were issued on 14 June 2024 following the exercise of 355,250 Class F performance rights.
•
7,360,000 shares were issued on 26 March 2024 following the exercise of 7,360,000 Performance Rights to
management and employees of Blackspur Oil Corp pursuant to the Employee Share Plan.
•
On 31 December 2024, 2,500,000 performance class C securities were relinquished and cancelled.
There were 10.3 million performance rights converted to common shares during the year ended 31 December 2023.
19. RELATED PARTY TRANSACTIONS
The Calima Group’s related parties primarily consist of the Company’s directors and officers. Amounts paid to directors and
officers for the year ended 31 December 2024 and 2023 were as follows:
For the year ended
31 December
2024
31 December
2023
Short-term employer benefits
$
573,015
$
1,328,814
Other long-term benefits
400,281
87,339
Termination benefits
469,384
450,930
Stock-based compensation*
293,631
635,379
Total remuneration paid to directors and officers
$
1,736,311
$
2,502,461
* Includes the full value of performance rights that were relinquished and cancelled which total $253,267 which are
required to be expensed under the accounting standards.
For the year ended 31 December 2024, in addition to remuneration paid as disclosed above, $82,600 was paid to Burnett,
Duckworth & Palmer LLP, a related party to Mr. Tetley, for legal services related to the sale of the Company’s assets and
A$45,000 was paid to Meccano Consulting Pty Ltd., a related party to Mr. Freeman, for bookkeeping services related to the
Company’s operations. As at 31 December 2024 nil remained outstanding to either party.
For the year ended 31 December 2023, in addition to remuneration paid as disclosed above, $347,618 was paid to Burnett,
Duckworth & Palmer LLP, a related party to Mr. Tetley, for legal services related to the sale of the Company’s assets and
A$32,000 was paid to Meccano Consulting Pty Ltd., a related party to Mr. Freeman, for bookkeeping services related to the
Company’s operations. As at 31 December 2023 $222,000 remained unpaid to Mr. Tetley and $nil remained unpaid to Mr.
Freeman.
20. OTHER COMPREHENSIVE INCOME
Continuity schedule
31 December
2024
31 December
2023
Foreign currency reserve, opening
$
8,329,653 $
4,648,000
Unrealised gain (loss) recognised through other comprehensive income
-
3,681,653
Realisation on sale of subsidiary
(8,329,653)
Foreign currency reserve, ending
$
- $
8,329,653
Calima’s investments in its two Canadian subsidiaries, Blackspur and Calima Energy Inc., are exposed to fluctuations in
foreign currency exchange rates between the Australian and Canadian dollar. A foreign currency translation reserve is
utilised to record exchange differences arising from the translation of the financial statements of these foreign subsidiaries.
As the Company sold both of its Canadian subsidiaries in 2024, the foreign currency reserve has been extinguished.
30
21. AUDITOR REMUNERATION
For the year ended
31 December
2024
31 December
2023
Pricewaterhouse Coopers
Audit and assurance related services
$
-
$
325,817
Tax and other non-assurance related services
-
-
Total remuneration of external auditors
$
-
$
325,817
BDO Audit Pty Ltd
Audit and assurance related services
$
44,224
$
3,500
Tax and other non-assurance related services
105,216
10,000
Total remuneration of external auditors
$
149,440
$
13,500
22. SUPPLEMENTAL CASH FLOW INFORMATION
For the year ended
31 December
2024
31 December
2023
Non-cash investing and financing activities
Purchase of common shares
(1,492,345)
-
Repayment of term loan
(372,000)
(430,000)
Dividend paid and return of capital
(79,999,803)
(7,509,000)
Lease payments
-
(133,000)
Investments in oil and natural gas assets
(70,744)
(24,283,000)
Proceeds from sale of subsidiaries
83,974,052
-
Proceeds from property disposal
-
11,208,000
Gain (loss) on equity investment
-
(4,000)
$
2,039,160
$
(21,151,000)
Net Assets
Cash and cash equivalents
$
7,094,442
$
3,958,000
Accounts receivable
40,251
104,000
Deposits and prepaid expenses
95,817
91,000
Accounts payable and accrued liabilities
(119,450)
(372,000)
Net working capital
7,111,060
3,781,000
Net assets
$
7,111,060
$
3,781,000
Liabilities arising from financing activities
Credit Facility
Term Loan/ Other
Indebtedness
Leases
Total
Indebtedness
Total indebtedness – 31 December 2022 (1)
$
-
$
(3,787,000)
$ (252,000)
$ (4,039,000)
Financing cash flows
-
-
-
-
Foreign exchange adjustments
-
(91,000)
-
(91,000)
Transfer on disposition of property
-
-
252,000
252,000
Payment on term loan
-
430,000
-
430,000
Total indebtedness – 31 December 2023 (1)
$
-
$
(3,448,000) (2)
$
-
$ (3,448,000)
Payment on term loan
-
372,000
-
372,000
Transfer on disposition of property
-
3,076,000
-
3,076,000
Total indebtedness – 31 December 2024
$
-
$
-
$
-
-
(1)
Interest expense and payments included in the operating cash flows were equivalent in the year and have not been included in the table above.
(2)
Includes long term portion of $2,967,736 and current portion of $480,203 included in accounts payable of discontinued operations, see Note 7.
31
23. PARENT COMPANY FINANCIAL INFORMATION
As at and for the year ended
31 December
2024
31 December
2023
Statement of financial position
Current assets
$
7,230,510 $
754,396
Non-current assets
408,663
90,181,510
Total assets
7,639,173
90,935,906
Current liabilities
(151,562)
(232,226)
Non-current liabilities
(13,762)
-
Total liabilities
(165,324)
(232,226)
Net assets
7,473,849
90,703,680
Share capital
277,184,068
358,676,217
Share-based payments
22,213,675
22,136,101
Foreign currency translations
-
(118,203)
Accumulated losses
(291,923,895)
(289,990,435)
Total shareholders’ equity
$
7,473,849 $
90,703,680
Statement of profit or loss
Net income/(loss)
$
(209,053) $ (4,428,298)
Total comprehensive income/(loss)
$
(209,053) $
(4,428,298)
Guarantees
Calima Energy Ltd provided a guarantee to National Bank of Canada in respect of the unused loan facility of Blackspur Oil
Corp. This guarantee was extinguished following the sale of Blackspur Oil Corp.
Other Commitments and Contingencies
The parent entered into an office lease in 2024 for office space. The term of the lease is from 1 June 2024 to 31 May 2026.
24. INVESTMENT IN CONTROLLED ENTITIES
Investments in controlled entities held by Calima
Energy Limited
Country
31 December
2024
31 December
2023
Calima Energy Inc
Canada
-
100%
Calima Energy Holdings Ltd
Canada
-
100%
Blackspur Oil Corp
Canada
-
100%
Blackspur Holdings Inc.
Canada
-
100%
25. FINANCIAL RISK MANAGEMENT
The Calima Group’s policies with regard to financial risk management are clearly defined and consistently applied. They are
a fundamental part of the Calima Group’s long term strategy covering areas such as foreign exchange risk, interest rate risk,
commodity price risk, credit risk and liquidity risk and capital management. The natural hedges provided by the relationship
between commodity prices and the US currency reduces the necessity for using derivatives or other forms of hedging. The
Group does not issue derivative financial instruments, nor does it believe that it has exposure to such trading or speculative
holdings through its investments in wholly owned subsidiaries. Risk management is carried out by the Board as a whole,
which provides written principles for overall risk management, as well as policies covering specific areas such as foreign
exchange risk, interest rate risk, credit risk and liquidity risk. The group uses different methods to measure different types
of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and
other price risks and aging analysis for credit risk.
Market Risk
(i)
Foreign exchange risk
The Group is exposed to material foreign currency exposure on a group or company level. Such exposure arises from sales
or purchases by an operating unit in currencies other than the unit’s functional currency. The Calima Group currently
engages in hedging and/or derivative transactions to manage foreign currency risk. Refer note 10 above.
32
(ii)
Commodity price risk
Due to the nature of the Calima Group’s principal operations being oil & gas exploration and production the Group is
exposed to the fluctuations in the price of oil & gas. The Group currently engages in hedging or derivative transactions to
manage foreign currency risk. Refer note 11 above.
(iii)
Interest rate risk
Interest rate risk relates to the statement of financial position values of the consolidated cash at bank at 31 December 2024
and 31 December 2023.
(iv)
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Group is not significantly exposed to credit risk from its operating activities, however the
Board constantly monitors customer receivables. The maximum exposure to credit risk at the reporting date is the carrying
value of each class of financial asset. The Group does not hold collateral as security. No material exposure is considered to
exist by virtue of the possible non-performance of the counterparties to financial instruments and cash deposits. Credit
rating of cash is A+; all funds are held by Bank of Canada and NAB which have government guarantees on deposits.
The maximum exposure to credit risk at the reporting date is the carrying amount of the assets as summarised below, none
of which are impaired or past due.
Carrying Amount
31 December
2024
31 December
2023
Statement of financial position
Cash
$
7,094,442 $
3,957,653
Receivables
40,251
104,023
(v)
Capital Risk and Liquidity Risk Management
The Calima Group’s overriding objectives when managing capital are to safeguard the business as a going concern; to
maximise returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure in order
to reduce the cost of capital. Prudent liquidity risk management implies maintaining sufficient cash and marketable
securities and the availability of funding through an adequate credit facility. The Group manages liquidity risk by
continuously monitoring forecast and actual cash flows. Surplus funds are generally only invested in instruments that are
tradeable in highly liquid markets.
Financing Arrangements
The Calima Group’s access to borrowings were extinguished upon the sale of Blackspur Oil Corp in February 2024.
Maturities of financial liabilities
The tables below analyse the Group’s financial liabilities and relevant maturity groupings based on the remaining period at reporting
date to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows.
At 31 December 2024
Less than
6 months
6-12
months
Between 1
and 2 years
Between 2 and
5 years
Over 5 years
Total
contractual cash
flows
Carrying amount
liabilities
Financial Liabilities
Trade creditors
119,455
-
-
-
-
119,455
119,455
Total
119,455
-
-
-
-
119,455
119,455
At 31 December 2023
Less than
6 months
6-12
months
Between 1
and 2 years
Between 2 and
5 years
Over 5 years
Total
contractual cash
flows
Carrying amount
liabilities
Financial Liabilities
Trade creditors
371,356
-
-
-
-
371,356
371,356
Total
371,356
-
-
-
-
371,356
371,356
33
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
Calima Energy Limited has no controlled entities and as at 31 December 2024. As a result, section 295(3A)(a) of the
Corporations Act 2001 does not apply to the entity.
34
DIRECTORS’ DECLARATION
The Directors of Calima Energy Limited declare that:
(a) In the Directors’ opinion, the annual financial statements and notes, set out on pages 10 to 33, are in accordance
with the Corporations Act 2001, including:
i.
Complying with relevant Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001; and,
ii.
Giving a true and fair view of the Calima Group’s financial position as at 31 December 2024 and of its
performance for the financial year ended on that date.
(b) In the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts
as and when they become due and payable.
(c) The consolidated entity disclosure statement is true and correct.
Note 2 confirms that the consolidated financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
The Directors have been given the declarations by the Executive Chairman and Finance Director/Chief Financial Officer,
Canada required by Section 295A of the Corporations Act 2001 for the financial period ended 31 December 2024.
This Directors’ Declaration is made in accordance with a resolution of the Directors.
On behalf of the Board of Directors:
Glenn Whiddon
Executive Chairman
1 April 2025
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of A.C.N. 050 110 275 Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit Pty Ltd and A.C.N. 050 110 275 Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Calima Energy Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Calima Energy Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 31 December 2024, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including material accounting policy information, the consolidated entity
disclosure statement and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
i) Giving a true and fair view of the Group’s financial position as at 31 December 2024 and of its
financial performance for the year ended on that date; and
ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards.Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report.We are independent of the Group in accordance with the Corporations Act
2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES
110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that
are relevant to our audit of the financial report in Australia.We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
35
Other information
The directors are responsible for the other information.The other information obtained at the date of
this auditor’s report is information included in the Director’s report, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a)
the financial report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001 and
b)
the consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i)
the financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error; and
ii)
the consolidated entity disclosure statement that is true and correct and is free of misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion.Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists.Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
36
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/media/apzlwn0y/ar3_2024.pdf
This description forms part of our auditor’s report.
BDO Audit Pty Ltd
Jarrad Prue
Director
Perth, 01 April 2025
37
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of A.C.N. 050 110 275 Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit Pty Ltd and A.C.N. 050 110 275 Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF CALIMA ENERGY LIMITED
As lead auditor of Calima Energy Limited for the year ended 31 December 2024, I declare that, to the
best of my knowledge and belief, there have been:
1.
No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2.
No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Calima Energy Limited and the entities it controlled during the period.
Jarrad Prue
Director
BDO Audit Pty Ltd
Perth
01 April 2025
38
39
ADVISORIES & GUIDANCE
Forward Looking Statements
This release may contain forward-looking statements. These statements relate to the Company’s expectations, beliefs, intentions or strategies
regarding the future. These statements can be identified by the use of words like “anticipate”, “believe”, “intend”, “estimate”, “expect”, “may”,
“plan”, “project”, “will”, “should”, “seek” and similar words or expressions containing same. These forward-looking statements reflect the
Company’s views and assumptions with respect to future events as of the date of this release and are subject to a variety of unpredictable risks,
uncertainties, and other unknowns. Actual and future results and trends could differ materially from those set forth in such statements due to
various factors, many of which are beyond our ability to control or predict. These include, but are not limited to, risks or uncertainties associated
with the discovery and development of oil and natural gas reserves, cash flows and liquidity, business and financial strategy, budget, projections
and operating results, oil and natural gas prices, amount, nature and timing of capital expenditures, including future development costs,
availability and terms of capital and general economic and business conditions. Given these uncertainties, no one should place undue reliance
on any forward-looking statements attributable to Calima, or any of its affiliates or persons acting on its behalf. Although every effort has been
made to ensure this release sets forth a fair and accurate view, we do not undertake any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
Non-GAAP measures
This annual report includes certain meaningful performance measures commonly used in the oil and natural gas industry that are not defined
under IFRS, consisting of "adjusted EBITDA”, "adjusted working capital", "available funding” and “net debt”. These performance measures
presented in this annual report should not be considered in isolation or as a substitute for performance measures prepared in accordance with
IFRS and should be read in conjunction with the financial statements. Readers are cautioned that these non-GAAP measures do not have any
standardised meanings and should not be used to make comparisons between Calima and other companies without also considering any
differences in the method by which the calculations are prepared. Refer to the other sections of this annual report and the definitions below for
additional details regarding the calculations.
Corporate governance
Information related to the Calima Group’s corporate governance practices can be found on the Company’s website located here:
(https://calimaenergy.com/corporate-governance/).
40
Oil and Gas Glossary and Definitions
Term
Meaning
Adjusted EBITDA:
Adjusted EBITDA is calculated as net income (loss) before interest and financing expenses, income taxes, depletion,
depreciation and amortisation, and adjusted to exclude certain non-cash, extraordinary and non-recurring items
primarily relating to gains on acquisition, gains and losses on financial instruments, transaction and advisory costs,
exploration expenses and impairment losses. Calima utilises adjusted EBITDA as a measure of operational
performance and cash flow generating capability. Adjusted EBITDA impacts the level and extent of funding for
capital projects investments or returning capital to shareholders.
Adjusted working
capital:
Adjusted working capital is comprised of current assets less current liabilities on the Company's statement of
financial position and excludes the current portions of risk management contracts and credit facility draws.
Adjusted working capital is utilised by Management and others as a measure of liquidity because a surplus of
adjusted working capital will result in a future net cash inflow to the business which can be used for future funding,
and a deficiency of adjusted working capital will result in a future net cash outflow which will require a future draw
from Calima’s existing funding capacity.
ARO / Asset
Retirement Obligation:
the process of permanently closing and relinquishing a well by using cement to create plugs at specific intervals
within a well bore
Available funding:
Available funding is comprised of adjusted working capital and the undrawn component of Blackspur’s credit
facility. The available funding measure allows Management and other users to evaluate the Company’s liquidity.
Credit Facility Interest:
Borrowings under the Credit Facility incur interest at a market-based interest rate plus an applicable margin which
varies depending on Blackspur’s net debt to cash flow ratio. Interest charges are between 150 bps to 350 bps on
Canadian bank prime borrowings and between 275 bps and 475 bps on Canadian dollar bankers’ acceptances. Any
undrawn portion of the demand facility is subject to a standby fee in the range of 20 bps to 45 bps. Security for the
credit facility is provided by a C$150 million demand debenture
CO2e:
carbon dioxide equivalent
Conventional Well:
a well that produces gas or oil from a conventional underground reservoir or formation, typically without the need
for horizontal drilling or modern completion techniques
Compression:
a device or facility located along a natural gas pipeline that raises the pressure of the natural gas flowing in the
pipeline, which in turn compresses the natural gas, thereby both increasing the effective capacity of the pipeline
and allowing the natural gas to travel longer distances
Corporate Decline:
consolidated, average rate decline for net production from the Company’s assets
Exit Production:
Exit production is defined as the average daily volume on the last week of the period
Operating Income:
Oil and gas sales net of royalties, transportation and operating expenses
Financial Hedge:
a financial arrangement which allows the Company to protect against adverse commodity price movements, the
gains or losses of which flow through the Company’s derivative settlements on its financial statements
Free Cash Flow (FCF):
represents Hedged Adjusted EBITDA less recurring capital expenditures, asset retirement costs and cash interest
expense
Free Cash Flow Yield:
represents free cash flow as a percentage of the Company’s total market capitalisation at a certain point in time
Funds flow from
operations:
Funds flow is comprised of cash provided by operating activities, excluding the impact of changes in non-cash
working capital. Calima utilises funds flow as a measure of operational performance and cash flow generating
capability. Funds flow also impacts the level and extent of funding for investment in capital projects, returning
capital to shareholders and repaying debt. By excluding changes in non-cash working capital from cash provided by
operating activities, the funds flow measure provides a meaningful metric for Management and others by
establishing a clear link between the Company's cash flows, income statement and operating netbacks from the
business by isolating the impact of changes in the timing between accrual and cash settlement dates.
Gathering &
Compression (G&C):
owned midstream expenses; the costs incurred to transport hydrocarbons across owned midstream assets
Gathering &
Transportation (G&T):
third-party gathering and transportation expense; the cost incurred to transport hydrocarbons across third-party
midstream assets
G&A:
general and administrative expenses; may be represented by recurring expenses or non-recurring expense
Hyperbolic Decline:
non-exponential with subtle multiple decline rates; hyperbolic curves decline faster early in the life of the well and
slower as time increases
LMR:
The LMR (Liability Management Ratio) is determined by the Alberta Energy Regulator (“AER”) and is calculated by
dividing Blackspur’s deemed assets by its deemed liabilities, both values of which are determined by the AER.
LOE:
lease operating expense, including base LOE, production taxes and gathering & transportation expense
Midstream:
a segment of the oil and gas industry that focuses on the processing, storing, transporting and marketing of oil,
natural gas, and natural gas liquids
Net Debt / working
capital surplus
Net debt/working capital surplus is calculated as the current and long-term portions of Calima’s credit facility
draws, lease liabilities, term loan and other borrowings net of adjusted working capital. The credit facility draws
are calculated as the principal amount outstanding converted to Australian dollars at the closing exchange rate for
the period. Net debt is an important measure used by Management and others to assess the Company's liquidity
by aggregating long-term debt, lease liabilities and working capital.
NGL / Natural Gas
Liquids:
hydrocarbon components of natural gas that can be separated from the gas state in the form of liquids
Net Debt/Adjusted
EBITDA (Leverage)
a measure of financial liquidity and flexibility calculated as Net Debt divided by Hedged Adjusted EBITDA
Net Revenue Interest:
a share of production after all burdens, such as royalty and overriding royalty, have been deducted from the
working interest. It is the percentage of production that each party receives
Operating Costs:
total lease operating expense (LOE) plus gathering & compression expense
Operating Netback:
Operating netback is calculated on a per boe basis and is determined by deducting royalties, operating and
transportation from oil and natural gas sales, after adjusting for realised hedging gains or losses. Operating netback
41
Term
Meaning
is utilised by Calima and others to assess the profitability of the Company’s oil and natural gas assets on a
standalone basis, before the inclusion of corporate overhead related costs. Operating netback is also utilised to
compare current results to prior periods or to peers by isolating for the impact of changes in production volumes.
Physical Contract:
a marketing contract between buyer and seller of a physical commodity which locks in commodity pricing for a
specific index or location and that is reflected in the Company’s commodity revenues Production Taxes: state taxes
imposed upon the value or quantity of oil and gas produced
Promote:
an additional economic ownership interest in the jointly-owned properties that is conveyed cost-free to the
operator in consideration for operating the assets
PDP/ Proved
Developed Producing:
a reserve classification for proved reserves that can be expected to be recovered through existing wells with
existing equipment and operating methods
PV10:
a standard metric utilised in SEC filings for the valuation of the Company’s oil and gas reserves; the present value
of the estimated future oil and gas revenues, reduced by direct expenses, and discounted at an annual rate of 10%
RBL / Reserve Based
Lending
a revolving credit facility available to a borrower based on (secured by) the value of the borrower’s oil and gas
reserves
Royalty Interest or
Royalty:
Interest in a leasehold area providing the holder with the right to receive a share of production associated with the
leasehold area
Terminal decline:
represents the steady state decline rate after early (initial) flush production
tCO2:
Tonnes of Carbon Dioxide
Unconventional Well:
a well that produces gas or oil from an unconventional underground reservoir formation, such as shale, which
typically requires hydraulic fracturing to allow the gas or oil to flow out of the reservoir
Upstream:
a segment of the oil and gas industry that focuses on the exploration and production of oil and natural gas
Working Capital Ratio:
The working capital ratio as the ratio of (i) current assets plus any undrawn availability under the facility to (ii)
current liabilities less any amount drawn under the facilities. For the purposes of the covenant calculation, risk
management contract assets and liabilities are excluded.
WI/ Working Interest:
a type of interest in an oil and gas property that obligates the holder thereof to bear and pay a portion of all the
property's maintenance, development, and operational costs and expenses, without giving effect to any burdens
applicable to the property
Abbreviation
Abbreviation meaning
Abbreviation
Abbreviation meaning
1P
proved reserves
IP30
Average oil production rate over the
first 30 days
2P
proved plus Probable reserves
A$ or AUD
Australian dollars
3P
proved plus Probable plus Possible Reserves
C$ or CAD
Canadian dollars
bbl or bbls
barrel of oil
US$ or USD
United states dollars
boe
barrel of oil equivalent (1 bbl = 6 Mcf)
($ thousands)
figures are divided by 1,000
d
suffix – per day
($ 000s)
figures are divided by 1,000
GJ
gigajoules
Q1
first quarter ended March 31st
mbbl
thousands of barrels
Q2
second quarter ended June 30th
mboe
thousands of barrels of oil equivalent
Q3
third quarter ended September 30th
Mcf
thousand cubic feet
Q4
fourth quarter ended December 31st
MMcf
million cubic feet
YTD
year-to-date
NGTL
Nova Gas Transmission Line
YE
Year end
PDP
proved developed producing reserves
H1
six months ended June 30th
PUD
Proved Undeveloped Producing
H2
six months ended December 31st
C
Contingent Resources – 1C/2C/3C – low/most
likely/high
B
Prefix – Billions
Net
Working Interest after Deduction of Royalty
Interests
MM
Prefix - Millions
NPV (10)
Net Present Value (discount rate), before
income tax
M
Prefix - Thousands
EUR
Estimated Ultimate Recovery per well
/d
Suffix – per day
WTI
West Texas Intermediate Oil Benchmark Price
bbl
Barrel of Oil
WCS
Western Canadian Select Oil Benchmark Price
boe
Barrel of Oil Equivalent (1bbl = 6 mscf)
1P or TP
Total Proved
scf
Standard Cubic Foot of Gas
2P or TPP
Total Proved plus Probable Reserves
Bcf
Billion Standard Cubic Foot of Gas
3P
Total Proved plus Probable plus Possible
Reserves
tCO2
Tonnes of Carbon Dioxide
EBITDA
Earnings before interest, tax, depreciation,
depletion and amortisation
OCF
Operating Cash Flow, ex Capex
Net Acres
Working Interest
E
Estimate
IP24
The peak oil production rate over 24 hours of
production
CY
Calendar Year
TD
Total depth